Nvidia Stock Has Taken a Beating. Buy the Dip?
Despite its incredible business growth, the chipmaker's shares aren't offering investors a great risk-reward trade-off at their current price.
In January, I warned investors to tread carefully when it came to Nvidia (NASDAQ: NVDA) shares. The tech stock's valuation left almost no room for error. Even though the business is seeming to fire on all cylinders, I concluded that Nvidia shares might not be a great investment since its premium valuation is already pricing in strong growth for years to come.
But what about now? As of this writing, shares have fallen about 13% since that article was published. Has the stock's meaningful haircut made shares attractive? Unfortunately, Nvidia stock's valuation arguably still seems too rich.
One thing Nvidia continues to get right is growth. Sales and profits soared in the company's most recent quarter, its fourth quarter of fiscal 2025. Revenue is booming for Nvidia, largely fueled by the increasing demand for its data center graphics processing units (GPUs), which dominate the AI (artificial intelligence) accelerator market. Its fiscal fourth-quarter revenue surged 78% year over year to reach $35.1 billion, while Nvidia's total fiscal-year revenue increased by an impressive 114%, hitting $130.5 billion.
