The article was initially posted on Fool.com All numbers provided are in US dollars unless specified differently.
Within mere weeks, technology stocks have shifted from reaching record peaks to nosediving due to worries about tariffs and the possibility of an economic downturn.
As of March 11, the Nasdaq Composite (NASDAQINDEX: ^IXIC) has dropped 13.6% since reaching its closing high on December 17, 2024. This tech-focused index had been trading near record levels up until February 19 at most recent count. By Wall Street standards, the Nasdaq has slipped into a correction , which is characterized by a drop of 10% or more from the most recent high point.
Naturally, investors were rattled by declining consumer confidence figures, the turmoil around the fluctuating tariffs implemented by U.S. President Donald Trump, and the information that crucial economic indicators such as Delta Air Lines And other airlines have reduced their forecasts for the initial three months of the year.
The stock market currently has many uncertainties, however, experienced long-term investors understand that such downturns can offer chances for purchasing assets.
One specific stock has drawn considerable interest from investors lately. AI era. That stock, Nvidia (NASDAQ: NVDA) , has now lost more than any other on a market-cap basis in the recent retreat. The AI chip leader has seen roughly $1 trillion in market value wiped away since its peak earlier this year. This period has included the threat from DeepSeek AI, an underwhelming response to the company's fourth-quarter earnings report, and macro-level concerns around consumer sentiment, global economic growth, and business investment.
Currently, Nvidia has dropped 27% from its high point earlier this year, which could present an attractive entry for those interested in purchasing shares of this rapidly expanding chip company. Investors face a decision: should they seize this chance during the downturn or hold off until things stabilize? Here’s a deeper dive into what might be ahead for Nvidia stock.
The Nvidia setup
Despite facing several adverse reports this year regarding DeepSeek and the returns on investment for its clients in AI, Nvidia’s expansion continues to be impressive.
During the final quarter, the revenue surged by 78%, reaching $39.3 billion. Although this pace was slightly more gradual compared to earlier periods, it remains significantly higher than what companies of similar scale typically achieve. Nvidia anticipates maintaining this robust growth trajectory and forecasts approximately $43 billion in revenues for the upcoming first quarter, which represents a substantial increase of about 65% over last year’s figures.
Given those figures, investors should have confidence that the short-term prospects for the business remain robust. Additionally, Nvidia appears well-placed for sustained success over the coming years. The demand for their latest Blackwell platform still exceeds available stock, with the firm increasing manufacturing output at a pace unprecedented in its history.
In the long run, the company’s outlook remains promising. Even with the possibility of a worldwide economic downturn, the pursuit of artificial general intelligence (AGI) appears unstoppable, and the firm’s advanced tech is poised to contribute significantly to upcoming developments that current investors might not fully envision. Over the past ten years, the semiconductor industry has experienced remarkable growth, and the escalating demand for microchips used in data centers, household devices, and autonomous vehicles looks set to continue expanding throughout the coming decade.
Is Nvidia a buy?
Any share has the potential to drop in value over the short term, and this definitely applies to Nvidia. Given that the semiconductor industry operates cyclically, the stock may perform negatively when indicators suggest an economic downturn.
Nevertheless, beyond its potential mentioned earlier, Nvidia’s stock price is unexpectedly low following the recent downturn. Currently, it is trading at a forward basis. price-to-earnings (P/E) ratio at only 24 years old, which is similar to the S&P 500 Its forward P/E ratio stands at 20.7.
Given that Nvidia does not appear to be immediately threatened by tariffs or the ongoing trade conflict, and considering the persistent high demand for their advanced offerings, the company’s shares look quite attractive.
Short-term fluctuations should not discourage long-term investors from capitalizing on Nvidia’s share downturn. Having dropped almost 30% from its highest point, this frontrunner in artificial intelligence appears to be a great purchase at present.
The article was initially released on Fool.com All numbers provided are in US dollars unless specified differently.
The post Nasdaq stock market downturn: Should you consider buying Nvidia at this moment? appeared first on The Motley Fool Australia .
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Motley Fool contributor Jeremy Bowman The Motley Fool Australia’s parent company, Motley Fool Holdings Inc., holds stakes in Nvidia and has endorsed this stock. Additionally, Motley Fool Holdings Inc. recommends investing in Delta Air Lines. Furthermore, The Motley Fool Australia also suggests purchasing shares of Nvidia. It should be noted that The Motley Fool maintains certain recommendations and holdings. disclosure policy This article includes solely general investment guidance (covered under AFSL 400691). Authorized by Scott Phillips.
