Wall Street Just Punished Nvidia--Here's Why That Could Be a Huge Mistake
Nvidia (NASDAQ:NVDA) just posted its worst start to the year since 2022, falling 15.3% year-to-datedespite everything pointing to surging AI demand. The pullback has little to do with fundamentals and everything to do with fear. With Trump floating new tariffs and refusing to rule out a recession, investors are jittery. But here's the thing: Nvidia's AI engine hasn't slowed one bit.
Warning! GuruFocus has detected 3 Warning Signs with NVDA.
Just look at the data. Taiwan Semiconductor (NYSE:TSM)Nvidia's main AI chip partnerreported a 43% jump in February sales. Foxconn, meanwhile, rolled out its FoxBrain AI platform with help from Nvidia's local supercomputing team. The growth levers are still turning. Melius Research's Ben Reitzes thinks so too. He's still calling NVDA a Buy, even as he trimmed his target to $170 from $195, citing short-term regulatory fog. At just 24.2x forward earnings (well below its 5-year average of 40x), the stock isn't priced like a company defining the next decade of computing.
All eyes now turn to Nvidia's GPU Technology Conference next week. CEO Jensen Huang is expected to map out the future: Blackwell Ultra, Rubin GPUs, an Arm-based CPU called Vera, and what's coming in 2027. Innovation's not slowingjust investor appetite. If Nvidia outlines a clear product pipeline and reaffirms long-term AI tailwinds, this selloff could look like a rare buying window in hindsight.
This article first appeared on GuruFocus.
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