Although it is not fun to look at your portfolio drop during a stock market sale, these things occasionally happen. However, individual actions (in particular strong growth) are affected disproportionately, which can cause investors in actions such as Nvidia (Nvda -5.88%)) To panic.
I think it is an instinctive reaction, and investors must understand that if Nvidia can see a drop in demand (just like many other companies), there is always a rear wind that blows in favor of Nvidia, and is not the time to sell; It’s time to buy.
NVIDIA GPUs are in high demand
NVIDIA was one of the most dominant actions on the market from 2023 to 2024. He became the poster child of the AI arms race because he sold Graphic processing units (GPU)which are perfectly suited to the tasks which require a large power of calculation such as the AI models. Nvidia customers have built massive data centers, some filled with more than 100,000 GPUs, but it is still not enough.
Some main AI companies have declared that each iteration of their Generative AI model Takes more and more computing power, which augurs well for the future of Nvidia. During the NVIDIA GTC event in 2025, CEO Jensen Huang said that capital expenses in the data center should reach 1 Billion by 2028. This increases compared to the $ 400 billion brand of 2024, and with the Down of Nvidia of 12 months totaling $ 130 billion, this clearly obtains a huge reduction in this market.
However, this is not the dominant story with the Nvidia stock; The wider economy is.
Investors fear that President Donald Trump’s prices could send the economy to a recession, harming companies like Nvidia. But they forget that certain trends (like AI) are greater than that and can probably survive the pressure of the wider economy. Nvidia’s largest customers have massive cash flows, and even if these cash flows can decrease slightly due to consumer pressure, they will probably not fall to zero.
The importance of winning the AI arms race (or at least to remain competitive) cannot be underestimated. Generative AI models and the advantages they bring are the largest technological innovation since the Internet, and having a strong offer of AI will be the key to companies surviving in five years.
Because I focus on the long term (at least five years), I can see through the fears of tomorrow (which are valid). The general management that Nvidia’s affairs are on the rise is up and right, even if the course of action goes in the opposite direction.
So, if you worry about the course of Nvidia’s action in the short term, don’t forget that you have bought NVIDIA actions for GPUs, which feed the long -term deployment of the AI.
But if you are a little more daring and not just happy to hold the Nvidia stock, appears at the moment as a fantastic purchasing opportunity.
The course of NVIDIA’s action is starting to be very attractive
After the sale of the market, Nvidia’s actions have reached levels that had not been seen for some time.
NVDA PE ratio (forward) data by Ycharts
It’s the lowest Price / benefit ratio (P / E) Nvidia has exchanged since 2023 and the lowest P / E shape He exchanged at the beginning of 2024. It was notable, because there was extreme pessimism on the market at the beginning of 2023, because investors were sure that the economy would plunge into a recession.
If you compare Nvidia’s actions to S&P 500 Index, things seem even better to buy Nvidia’s actions at the moment. The S&P 500 is negotiated at a long term of 20, which means that Nvidia’s action is not a much higher price than the market. This is strange to say, because Wall Street analysts expect Nvidia’s revenues to increase 56% this year and 23% next year. The two growth rates are much higher than the typical growth rate of the larger market, which is a bull sign for long -term investors.
Although short -term economic fears can be frightening, investors should focus on the long term to overcome these concerns. If you can do it, it is clear that Many actions are purchases of good deals at the moment, Nvidia being one of them.