THE Nasdaq Composite (^ Ixic -4.00%)) went into correction territory (down at least 10% of the summits of all time). An important contributor to this drop was Nvidia (Nvda -5.07%)) The shares, which are down approximately 20% over a year, when writing this document. The flea manufacturer reported recently pending results, but investors’ concerns about prices and the United States suddenly seemed to be heading for a recession shaken the short-term market.
For investors interested in Nvidia who have a long -term state of mind, this price correction presents an excellent opportunity to collect NVIDIA actions at low prices. Let us examine three reasons why the stock is a must for the long term on this drop.
1. Nvidia is the leader of artificial intelligence
With a market share of around 90% to Graphic processing units (GPU)Nvidia is the dominant leader among flea designers who feed the Artificial Intelligence (AI) Infrastructure building. Although originally designed to accelerate the rendering of graphics in video games, the rapid processing times of NVIDIA GPUs made them ideal to help train Linguistic models (LLMS) and run inference for ai.
In addition, the CUDA (Calculation Unified Device Architecture) platform has helped create a large gap for the company. NVIDIA has become the first company to allow GPUs to be scheduled for tasks outside their original objective in 2006 via Cuda. As such, the developers have learned to program GPUs using the Nvidia software platform.
Rival Advanced micro-apparents (Dmla -3.67%)) did not present its ROCM software platform (Radeon Open Calculation) before about 10 years later in 2016. Meanwhile, via Cuda-X, which was built above Cuda, Nvidia now has a complete software composed of libraries, microservices and tools designed to accelerate applications in the fields of AI and high calculation.
Cuda and Cuda-X continue to be the main reason for the domination of Nvidia, in particular in the formation of AI models. In a recent study, Semiconductor Researching Tivet Semiianalysis revealed that the latest GPUs of AMD unusable for the formation of AI out of the box due to software bugs, while praising Nvidia chips. As such, Nvidia remains the best placed company to continue to benefit from the growth of AI infrastructure.
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2. The infrastructure of the AI data center continues to grow
Despite the Chinese AI company Deepseek The allegations of building an effective AI model at a lower cost (how effective it is is challenged), the best known way to advance AI models is currently by the raw calculation force. This means building systems with more and more IA chip clusters.
The recent iterations of the AI model needed more exponential GPU chips on which to be formed than their predecessors. For example, Meta-platformThe LLAMA 4 LLM needed 10 times more GPU to be formed than LLAMA 3. XAI supported by Elon MUSK, in the meantime, originally used GPUs (100,000) to build its GROK 3 model before doing it up to 200,000 GPU.
In the meantime, Cloud Computing Companies, as well as other technological companies, pay money into the construction of AI data centers. The three major cloud computing companies plan to spend this combined year of $ 255 billion to build AI data centers to help meet demand.
Cloud computing is an infrastructure platform as a service, and customers have used these services to help customize and create their own AI models and applications. Meanwhile, Meta plans to spend up to $ 65 billion Capital expenditure (CAPEX) This year was largely aimed at extending its IA infrastructure, while a consortium led by Openai and Flexible bank have undertaken to spend $ 500 billion in the coming years to build AI data centers in the United States via the Stargate project.
All this indicates many future continuous expenses in AI infrastructure in the coming years. As such, Nvidia remains well positioned to continue to grow.
3. Nvidia’s stock is inexpensive
The third major reason to own Nvidia is that its stock remains at an attractive price. The stock is currently negotiating at a Price ratio / term benefit (P / E) 24 times 2025 analyst estimates and a Price / benefit / growth ratio (PEG) less than 0.5. PEG ratios under 1 generally indicate that a stock is undervalued and growth stocks will often be negotiated to PEGs well above 1.
Data by Ycharts.
Nvidia is not a Software-As-A-Service (SaaS) Company with a recurring and predictable source of income, it will therefore not order the same type of multiple evaluation as these types of businesses – and should not either. However, its current evaluation is inexpensive, since we always seem to be at the start of AI and that IA infrastructure expenses will continue to increase. As such, the recent decline resembles a solid opportunity to purchase in the long -term stock.
Randi Zuckerberg, former Director of Development of the Facebook and Sister of the CEO of Meta Platforms, Mark Zuckerberg, is a member of the board of directors of Motley Fool’s. Geoffrey Seiler Has no position in the actions mentioned. The Motley Fool has positions and recommends advanced micro-apparently, meta-platforms and Nvidia. The Word’s madman has a Disclosure policy.