Nvidia (Nvda 1.92%)) was the undeniable leader in the boom of artificial intelligence (AI) of the last two years and more than 600% since the beginning of 2023 and its market capitalization now oscillating about 3 billions of dollars.
However, in recent times, Nvidia’s stock has seemed surprisingly deadly. The equity lessons of the AI leader are negotiated on around 16% of the year to date, and the action has dropped by 8% last Thursday following his report on profits even if he beat estimates and offered solid advice. The company has declared income growth of 78% in the fourth quarter to 39.3 billion dollars, which exceeded consensus to $ 38.2 billion and a profit adjusted per share (BPA) rose from $ 0.49 to $ 0.89, in advance on estimates at $ 0.85. Finally, its directives in the first quarter required a turnover of around $ 43 billion, better than analysts’ expectations of $ 42.05 billion.
The sale may indicate a fatigue of investors with NVIDIA, and the stock continued to slip in the days that followed in the concerns concerning the new price cycle of President Donald Trump as well as the concerns that some of his tokens were illegally exported to China. The action is now exchanging 27% compared to its peak just a few months ago and its lowest point since September 2024.
For investors, the retirement of action presents a dilemma. Many are sitting on large gains from Nvidia Stock and may be wondering if the sale makes sense, because the momentum of the company seems to slow down and the macroeconomic perspectives become more clouds.
Let’s go back to the recent history of the action to see if it can inform where the stock of here will go.
Nvidia’s volatility history
THE semiconductor sector Tends to be cyclical and volatile, and the rise of Nvidia to become one of the most precious companies in the world has not arrived well.
The graph below shows how far Nvidia has fallen from its peak since the start of the AI boom in 2023.
Looking at the data, there was only another opportunity in the last two years when Nvidia has retired as far as now. This sale began in July 2024 on broader fears concerning investment in AI infrastructure slowing down concerns that large cloud computing companies like Microsoft And Alphabet were spent too much on new data centers and Nvidia chips without seeing significant yields to justify expenses. The sale also seemed to question the assessments of the AI sector.
While Nvidia experienced a double drop in this cycle, he was back to negotiations at peaks of all time in October 2024, just a few months after his start.
If we zoom in and take a longer view, we see a similar model.
As you can see, twice in the past decade, Nvidia’s stock has had 50% or more withdrawals. The first came in 2018 after an increase of one year in the stock as concerns concerning the increase in interest rates, tensions with China, a bubble that breaks out in the exploitation of cryptocurrencies and a slowed world economy (including the slowdown in semiconductor demand), put pressure on the stock. Nvidia’s revenues on a large part of 2019 fell, as well as investors have anticipated it. However, the stock was back to peaks of all time in about a year and a half from the start of this sample, more than double its substance.
Likewise, the actions plunged in 2022 as well as the wider crash in technological actions, because its income from the demand linked to the cryptocurrency dry, which reduces its global income. However, the excitement around AI helped up the stock to peaks of all time in about a year and a half again.
What it means for Nvidia
It is impossible to say how long the current withdrawal in the actions of Nvidia will last or how far the stock will fall.
However, what we know about Nvidia is that demand for its new Blackwell fleas continues to go beyond supply. The competitive advantage of the company in the graphic processing units of the data center (GPU) that make up the backbone of AI applications seem to become stronger, and the cloud computing increases increases in capital expenditure (CAPEX) this year. In addition, the race for general artificial intelligence (AGA) should continue even if the world economy is weakening.
For Nvidia, this is good news. Meanwhile, the action now seems as inexpensive as since the start of AI boom, because it has been negotiated with a price / benefit ratio (P / s) in the long term, in accordance with compliance with the S&P 500Even if the company increases much faster than the wide market index.
Nvidia will never be a low -risk stock, but the stock is likely to recover its recent losses at a given time. It is rebounded after higher withdrawals in the past, and its technological advantages and its positioning in the industry do so about to provide continuous growth. Back trading, the action looks like an excellent purchase at the moment.
Suzanne Frey, director of Alphabet, is a member of the board of directors of Motley Fool’s. Jeremy Bowman has positions in Nvidia. The Motley Fool has positions and recommends Alphabet, Microsoft and Nvidia. The Motley Fool recommends the following options: Long January 2026 Calls $ 395 on Microsoft and Court January 2026 405 $ calls Microsoft. The Word’s madman has a Disclosure policy.