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StockBeat: Nvidia in Malaise Despite Optimism Ahead of Earnings – Nvidia on Thursday struggled to regain its footing, following a drumming in the market a day earlier, even as analysts touted cautious optimism ahead of the chipmaker's results due later today.

Nvidia (NASDAQ:NVDA) fell 1%, underscoring a general malaise seen across chip stocks as rising US-China trade battles continued to spook chip investors.

China earlier today warned the U.S. that it stands ready to hit back with "countermeasures" if Washington goes ahead with proposed tariffs not delayed and go into effect Sept. 1.

“China will have to take the necessary countermeasures,” China’s Ministry of Finance said in a statement.

For Nvidia, the warning shot from China does little to justify the cautious optimism from Wall Street on the outlook of the chipmaker's gaming segment, which makes up the bulk of total revenue, ahead of its quarterly results due after closing bell.

"We expect Nvidia to signal a return to a normalized gaming environment,” Bank of America Merrill Lynch wrote in a recent note.

Earlier this week, Wedbush also lavished praise on the company's gaming sector.

“Fiscal second-quarter gaming revenues, as well as NVDA's fiscal third-quarter forecast, are likely to meet or exceed estimates in our view in light of modest expectations,” Wedbush said.

Nvidia is expected to report earnings of $1.14 a share on revenue of $2.55 billion.

Along with Nvida, other semiconductor stocks struggled. Advanced Micro Devices (NASDAQ:AMD), Broadcom (NASDAQ:AVGO) and Micron Technology (NASDAQ:MU) were in the red, though off session lows. The Philadelphia Semiconductor Index was roughly flat.

Broadcom's losses were exacerbated by a downgrade from Daiwa Securities to neutral from a buy. The brokerage also cut its price target on Broadcom (NASDAQ:AVGO) to $290 from $345.

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