Nvidia shares fell almost 10% on Tuesday, erasing nearly $300 bln in value — the biggest single-day loss ever for a US stock — but investors shouldn’t write-off this chipmaker, should consider it as a buying opportunity and explore the wider AI ecosystem.
The bullish response from Nigel Green, CEO of deVere Group, a leading independent financial advisory and fintech, came as Nvidia’s steep fall wiped $278.9 bln in market cap off the chipmaker and weighed on the broader market.
“Over the past three sessions, Nvidia is now down 14% after earnings that fell short of lofty expectations,” Green explained.
“The entire Philadelphia Semiconductor Index sank, with every member falling by at least 5.4%.
Nvidia faced further pressure as the US Justice Department issued subpoenas in an antitrust investigation, sending its stock down another 2% in late trading.
“As concerns grow that AI’s promised revolution might take longer than anticipated, some investors are rethinking the high valuations. But this is no time to write off Nvidia,” said the deVere chief executive.
Despite the recent turmoil, Nvidia remains at the forefront of the artificial intelligence revolution. Its cutting-edge GPUs are critical to AI applications across industries, from data centres to autonomous vehicles.
“The stock is still up 118% this year. The market may be reacting to short-term concerns, but Nvidia’s role in the future of AI remains solid. This dip should be viewed as a temporary setback, not a sign of declining relevance,” noted Green.
For investors with a long-term view, Nvidia’s dominant position in the AI landscape makes it a core holding, with many investors using this pullback as a buying opportunity.
“Nvidia’s sharp drop offers an attractive entry point into a company that continues to lead in the AI sector. The company’s fundamentals remain strong, and this correction provides a chance to accumulate shares at a discount,” Green said.
AI reshaping industries
“Investors who understand Nvidia’s long-term growth potential recognise that its value is not tied to quarterly fluctuations, but to the overarching AI trend that is set to reshape industries for years to come.
“Beyond Nvidia, this is also a moment to consider the broader AI ecosystem. While Nvidia is a key player, the AI revolution is a much larger story involving numerous companies.”
Green explained that the semiconductor manufacturers, AI software developers, cloud providers, and countless other firms are poised to benefit as AI adoption increases across sectors.
“The recent downturn in AI-related stocks, reflects short-term fears but offers long-term opportunities. In-the-know investors will look beyond the immediate market noise and focus on the companies driving AI’s continued expansion.”
Ultimately, Nvidia’s recent stock decline is more of a market recalibration than a signal of trouble ahead, he added. AI’s promise remains intact, and Nvidia will continue to be a critical enabler of that future. The company’s GPUs power the AI revolution, and demand for its products is expected to grow as AI becomes more integral to global economies.
“This pullback is not just a buying opportunity for Nvidia, but for the entire AI sector. Investors who take the long view will recognise that AI’s transformative potential far outweighs the current market volatility,” concluded the deVere CEO.
