Don't be a buyer in Nvidia's bear market, expert warns

As the tech sector faced intense volatility in the prior trading week, semiconductor manufacturer Nvidia (NVDA), in particular, has come under pressure. The former Gartman Letter editor and publisher Dennis Gartman joins Morning Brief to discuss Nvidia's movement and overall valuation.

"Each low recently has been lower. Each high has been lower. I think we're in a bear market in Nvidia, and I would not be a buyer. I'd rather own consumer disposables, I'd rather own REITs [real estate investment trusts], I'd rather own dividend-paying stocks. I'll avoid Nvidia," the University of Akron endowment committee chairman tells Yahoo Finance.

"I missed it on the way up. I'll miss it on the way down," Gartman argues. He notes that Nvidia peaked in the middle of July, and since then, it has gone lower, which he reads as a bear market indicator.

He adds, "I thought it was egregiously overextended a month and a half ago, but then again, I thought it was egregiously overextended about a year ago. I've been wrong about Nvidia. I've been wrong about high tech, and I admit it openly and consistently."

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Melanie Riehl

Video Transcript

Dennis.

I wanna switch gears here and specifically focus on NVIDIA and I bring this up because you had made some comments recently.

I think it was just about a month, maybe a month and a half ago that the A was egregiously over expensive and take a look at the decline that we have seen NVIDIA since you did make those comments and had been trading right around 100 bucks a share.

Now, I believe today it's right around 110, 112 here this morning.

Is it attractive at this price?

How should investors be thinking about the opportunity to buy NVIDIA?

I think clearly from the chart.

You can see that we made a high in July.

I think each, each low recently has been lower.

Each high has been lower.

I think we're in a bear market in NVIDIA and I would not be a buyer.

I'd rather own consumer depo disposables.

I'd rather own reits, I'd rather own dividend, paying stocks.

I'll avoid NVIDIA.

I missed it on the way up.

I'll miss it on the way down.

Dennis.

Why do you think we're in a bear market for NVIDIA?

Ju ju just given the fact that the Capex numbers that we got from Big Tech over the last couple of weeks, the fact that they are so dominant within this space.

Why are you taking that contrarian view?

Take a look at your chart again and cast the trend line across from the, from the going back to last year, we've broken that trend line.

No question about that.

The peak was in July and again, every year since July, uh the middle of July, the lows have been lower and the highs have been lower.

That looks to me like a bear market.

Can I be wrong?

Yes.

If we start to take out the recent highs made a week and a half ago, I'll be wrong.

But I think if, if you look at that chart, that's a, that's a definitive and, and rather major top so time shall tell.

Uh I thought it was egregiously overextended uh a month and a half ago.

But then again, I thought it was egregiously over extend over extended about a year ago.

I've been wrong about NVIDIA.

I've been wrong about high tech and I admit it openly and, and consistently.