Is Nvidia Stock a Buy After Hitting a Seven-Month Low? (Hint: Yes.)

Detailed summary

When AI stocks broadly pulled back last month, Nvidia lost more than 10% of its value. Then, late in October, it was revealed that CEO Jensen Huang had been having an affair with…

Many investors have been waiting for opportunities to buy into popular artificial intelligence (AI) stocks at a discount, and in recent years, those chances have been rare. But right now, perhaps the highest-quality AI stock globally is on sale.

From a business perspective, everything is going right for Nvidia (NASDAQ:NVDA). As the largest seller of graphics processing units (GPUs) in the world, the company has direct exposure to rising AI adoption because that technology relies heavily on GPUs and similar accelerators to function.

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And by most accounts, Nvidia designs the best GPUs on the market. That's especially true when considering the strength of the company's CUDA developer platform, which allows end users to program its chips to function exactly as needed. These strengths have helped Nvidia win an estimated 80% share of the market for GPUs in AI applications.

Few publicly traded companies, if any, are as levered to the AI economy as Nvidia. That has at times resulted in the shares trading at a premium. But even blue chip stocks occasionally experience corrections.

When AI stocks broadly pulled back last month, Nvidia lost more than 10% of its value. Then, late in October, it was revealed that CEO Jensen Huang had been having an affair with a woman who was allegedly a foreign intelligence operative. In all, these headwinds have sent shares down by about 30% from the all-time high they reached in October.

If you've been wanting to invest in blue chip AI stocks at a discount, this could be your chance. The underlying numbers look compelling.

The first headwind Nvidia has faced recently has been a pullback in AI stock valuations across the board.

"AI demand remains strong," reads a research report from…

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