Nvidia Has Now Lost More Than $1.3 Trillion in Market Cap. Is It Finally Time to Buy the Stock?
Rampant uncertainty regarding the future of AI has battered the chipmaker.
If investors had to choose just one company that exemplifies both the opportunities and risks associated with recent advances in artificial intelligence (AI), Nvidia (NASDAQ: NVDA) would be a logical choice. The company's graphics processing units (GPUs) have been the linchpin that powered the AI revolution and fueled Nvidia's atmospheric rise, as the stock gained more than 800% in just two years. However, it has since suffered a stark reversal of fortune, plunging 36% (as of this writing) and shedding more than $1.3 trillion from its market cap since earlier this year.
After a slump of this magnitude, is it finally time to buy the stock?
Several factors have contributed to Nvidia's downfall in recent months. China's DeepSeek, a high-performance AI model, was created without the benefit of Nvidia's state-of-the-art GPUs. This marked the beginning of the stock's current slump, but it didn't stop there.