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Stocks to Buy with the Trade War on Pause: Nvidia (NVDA)
Percent Off All-Time High: 40%
Why It Has Been Killed: Chipmaker Nvidia (NASDAQ:NVDA) was once viewed by the market as the face of AI, and was therefore treated as a market darling. But that has changed dramatically over the past two months as the company’s growth has slowed due to the crypto bubble popping and trade headwinds threatening input costs and demand.
Those issues came to a head last quarter, and the net result has been a 40% wipe-out in shareholder value in just two months.
Why It Will Bounce Back: This stock will rebound because this company is still the “AI company” with broad exposure to all things AI, including cloud, machine learning, autonomous driving, and so on and so forth.
All the market needs to re-value this company based on its AI potential is the right catalyst — and easing trade war tensions could be that catalyst.
Trade war tensions have created cost and demand issues for Nvidia and other chipmakers. With those issues gone, that is one less thing for the market to be worried about, and one more reason for investors to buy back into NVDA stock.
Source: Investor Place