Today might have been a rollercoaster for Nvidia (NASDAQ: NVDA) shareholders, with the stock ending the trading day on a somber note. The stock price witnessed a 1.7% decline by the closing bell, according to data from S&P Global Market Intelligence.
Although Nvidia shares initially dove as much as 7% at market open, they managed to rally to a 2.1% gain on positive economic data before eventually sliding back into bear territory. The drop was partly triggered by analysts predicting lackluster big-tech earnings could persist. Investors have been reallocating their funds away from the AI giant alongside other mega tech stocks due to geopolitical uncertainties and concerns over valuations. The recent underwhelming earnings reports from Alphabet and Tesla have only exacerbated the selling pressure.
This marks the fourth dip in Nvidia’s stock in the last five trading sessions. From its peak on June 18, the company’s stock has now tumbled approximately 17%. The pressing question on investors’ minds now is whether it’s an opportune moment to seize this high-profile AI stock?
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The Resilience of Nvidia Stock
Nvidia has transformed into a battleground stock and arguably the most influential company in shaping overall stock market performance. Its GPUs and other accelerated computing technologies hold the mantle for driving cutting-edge AI applications.
The company’s already robust data center computing technologies have been amplified by the surge in demand for AI services, leading to stellar sales and earnings growth in tandem with this trend. On the flip side, the meteoric rise of AI technologies is a relatively recent development, making it challenging to predict future performance and valuations.
Valuations of AI stocks are poised to witness substantial volatility as investors grapple with evaluating the economic opportunities spawned by tech advancements. However, Nvidia stands firm with its significant competitive edge courtesy of its best-in-class GPUs and associated software platform. There’s a strong likelihood that the company will maintain a dominant stance in the crucial AI hardware category.
For long-term investors seeking to capitalize on hardware technologies fueling key AI trends, adopting a dollar-cost-averaging strategy with Nvidia stock appears judicious at this juncture.
Is Now the Time to Invest $1,000 in Nvidia?
Before diving into Nvidia stock, ponder this:
The Motley Fool Stock Advisor experts recently pinpointed what they believe to be the 10 best stocks for investors to jump on now, with Nvidia not making the cut. These chosen 10 stocks have the potential to yield substantial returns in the forthcoming years.
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A board member at Alphabet, Suzanne Frey, is a part of The Motley Fool’s board of directors. Keith Noonan does not hold any positions in the mentioned stocks. The Motley Fool has stakes in and recommends Alphabet, Nvidia, and Tesla. The Motley Fool operates under a strict disclosure policy.
