What happened

Shares of Nvidia (NVDA 3.65%) surged higher Tuesday morning, jumping as much as 4.2%. As of 2:07 p.m. ET, the stock was still up 1% -- even as the three major indexes lost ground.

The catalyst that sent the semiconductor specialist higher was news that a well-known growth investor Cathie Wood is increasing her stake -- again.

So what

Nvidia stock has been in the dumps recently, pressured by a combination of slowing sales of graphics processing units (GPUs) used by gamers and new restrictions imposed by the U.S. government on data center and cloud computing chips sold to customers in China.

Cathie Wood, the founder and CEO of Ark Invest, has been taking advantage of the decline by buying Nvidia shares at a brisk pace. On Monday, in fact, Wood made one of her biggest purchases so far this month, buying up nearly 186,000 Nvidia shares worth $22.7 million.  

That's not all. Since the beginning of September, the various funds managed by Wood have added more than 588,000 shares of Nvidia stock, which is a core holding in five of the six flagship exchange-traded funds managed by Wood. These latest purchases bring Ark's stake in Nvidia to 1.25 million shares worth nearly $154 million. 

Now what

Investors have been understandably concerned about Nvidia stock, which is currently down roughly 63% from its high reached late last year. The combination of the tech-centric sell-off and the ongoing bear market have spooked some investors, particularly those with a near-term outlook.

Taking a step back, however, reveals a business that was firing on all cylinders before the economy turned south. For fiscal 2022 (ended Jan. 30), Nvidia grew revenue to a record $26.9 billion, up 61% year over year, resulting in record earnings per share of $3.85, up 123%. 

This shows that the underlying business is strong and will come roaring back once macroeconomic conditions improve. It's worth noting that in spite of the stock price decline, Nvidia shares are currently trading for roughly 10 times next year's sales. While that might seem pricey, it's the cheapest Nvidia stock has been for years. For those with a long-term outlook and the resources, buying now will seem like a brilliant move in five to 10 years' time.