Nvidia (NASDAQ:NVDA) represents a perfectly-shocking reminder that the markets can turn cruel at a moment’s notice. On the first day of October, NVDA stock was up 48% for the year.

That was an impressive haul given its string of outstanding annual returns. However, nothing lasts forever.

Unfortunately, the markets’ grim reaper came calling a few days later. Not helping matters was a mass dump among the major indices.

After Halloween’s session had passed, Nvidia stock had dropped nearly 26% for October. This month looked promising as shares began to tick upward. But that too was a head-fake, as NVDA is now staring at a 28% loss for the month.

Volatility and Nvidia Stock

This is what made NVDA stock so disappointing for bullish analysts. Between the second half of 2016 through September of this year, NVDA clearly traded within a well-defined bullish trend channel.

In addition, we saw bulls and bears test the channel’s upper and lower bounds. Largely, though, Nvidia stock traded in the middle of the range. Shares gave no massive trajectory indicator until it was too late.

Interestingly, we didn’t see Nvidia experience a parabolic high prior to its meltdown, a point to which I will return.

Fundamentally, NVDA stock didn’t receive support, either. Mostly, you can blame its third-quarter fiscal 2019 earnings report, where the company beat earnings projections but missed revenue targets. Moreover, the merciless cryptocurrency rout negatively impacted its growth potential.

Management admitted as such when it reduced Q4 revenue guidance to $2.7 billion, down 26% from the $3.4 billion consensus. Investors saw the writing on the wall, promptly dumping Nvidia stock 19% the following day.

The Finer Details and NVDA Stock

Admittedly, I didn’t like the stated print from Q3. But let’s go back to my earlier point about NVDA stock not turning parabolic prior to the selloff.

One thing we can determine from this is that Nvidia is unlikely a victim of irrational overvaluation. Instead, broader concerns such as the heated U.S.-China trade war, and later, the poor earnings report created panic. But even here, I think the bears are missing the finer details.

First, the Q4 sales guidance is a two-sided story. Yes, the double-digit drop against the consensus estimate was jarring. But on the other hand, management baked in the bad news (ie. the cryptocurrency disaster).

If the semiconductor firm meets consensus, we’re looking at roughly a 7% loss year-over-year. Of course, that’s not great, but given Nvidia’s revenue history, that loss is not guaranteed.

Second, the cryptocurrency scare itself is overplayed. Recall that the dramatic surge in blockchain valuations occurred mostly inside 2017.

This year has been the year of the unwinding, something competitor Advanced Micro Devices (NASDAQ:AMD) also experienced. At this point, Nvidia stock has likely absorbed all the crypto-related bad news; thus, it’s somewhat pointless to harp on it as a forward-looking indicator.

Third, Wall Street punished NVDA stock because the underlying company is holding onto mining-specific GPUs, and can’t foreseeably sell them. That’s because with crypto prices so low, the energy costs associated with mining blockchain assets become economically prohibitive.

However, this bearish argument is a bit misleading. For now, mining-specific GPUs won’t have demand from crypto miners. But Nvidia has the option of repurposing the GPUs so that they’re not wasted.

As I recently argued, the GPU architecture facilitates complex calculations to occur simultaneously. This attribute isn’t just beneficial for crypto-mining, but for other lucrative markets like artificial intelligence.

Nvidia Stock Is an Opportunity

While we’re on the subject of cryptocurrencies, don’t be quick to bet against them. Sure, the downfall is horrifying but I’ve seen this happen in this sector time and again. Plus, remember the flip side: once bullishness enters the digital markets, the lift is astronomical. Quickly, NVDA could transition from supply surplus to deeply backordered.

For Nvidia stock, we’re now at levels not seen since early summer of last year. Don’t get me wrong: headwinds like the trade war and revenue pressure “deserve” to correct the share price. But NVDA has lost nearly half its market value within the last two months.

Did the company suddenly become half as valuable because one of its GPU segments fell short? I think not. Still, you must respect the markets as they always have the last word.

So here’s my thinking process: if you’ve always wanted to buy NVDA stock but didn’t want to buy into rising strength, here’s your chance. But please keep the powder keg dry. The entire investment sector, not just Nvidia, is likely in for a bumpy finale to 2018.

As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.