Even though Nvidia (NASDAQ: NVDA) was spared somewhat from President Donald Trump’s global tariff plans, the tech giant’s shares plunged with the rest of the market late last week. After a more than 10% two-day drop, Nvidia shares continued to fall by more than 8% early Monday. The stock then reversed course surging higher before going back into the red.
Volatility is the name of the game right now. All the selling has pushed the Nasdaq Composite into bear market territory. Every market crash brings both pain and opportunity, though. With Nvidia stock now down more than 30% year to date, investors should consider whether it’s time to own some shares of the artificial intelligence (AI) leader.
Every investor needs to be prepared for turbulent times. Trump’s tariff plan could increase inflation at the same time that it hinders growth. That dreaded stagflation outcome would be game-changing for the markets after two consecutive years of more than 20% gains. The potential of a recession is not off the table either. So tightening belts and ensuring a cash cushion safety net should be at the forefront right now.
Yet investing during downturns can be a springboard for future outperformance. Nvidia’s business may take a hit if there are material economic impacts ahead. But it remains the AI sector leader and its business will recover. Other businesses will also recover and the use of AI to improve efficiency and cut costs is not going to go away.
The sell-off has Nvidia stock trading at an intriguing valuation right now. A forward price-to-earnings (P/E) ratio of about 21 will look like a bargain down the road in times of economic growth.
It isn’t time to jump in with both feet since the situation is volatile. Tariff decisions could change, and the market could make a sudden turn. Or the market carnage could get worse in the near term. Nvidia is one stock that investors should consider adding, though, during the turbulent times.
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