Nvidia (NVDA +1.73%) shares plunged more than 6% yesterday as global markets dropped from several negative catalysts. The selling started in Japan after the Bank of Japan raised interest rates, helping to trigger the unwinding of "carry trades" made by investors taking advantage of that country's lower rates. Nvidia also had some company-specific news over the weekend (see below).
But some investors are looking at Nvidia's drop as a buying opportunity. That's led to a rebound of as much as about 6% in the stock today. Still, the advanced semiconductor maker's stock has dropped by more than 15% over the last month. It remains a buying opportunity, even with today's bounce.
NASDAQ: NVDA
Key Data Points
Nvidia doesn't have a supply or demand issue
Reports over the weekend about a newly discovered design flaw in Nvidia's next-generation Blackwell artificial intelligence (AI) platform helped fuel yesterday's sell-off. While the company didn't acknowledge a problem, it would mean only a few months' delay in the start of Blackwell sales, even if the reports are true.
As Oppenheimer analyst Rick Schafer noted in a new research note, there's still plenty of demand for Nvidia's existing Hopper series H100 chips to fill any delay in Blackwell sales. Schafer may have eased some investor concerns, writing, "Nvidia's competitive position remains sound, and we don't expect any share loss from a minor delay."
Just how robust the demand for H100 chips remains will be a focus for investors when Nvidia releases its next quarterly report on Aug. 28. Any positive comments could help the stock regain what it has given up since its record peak in mid-June. Once sales of Blackwell start being reported, there could be even more fuel to drive shares higher.
That is what investors are considering as they add Nvidia shares on the recent drop. While it will likely remain volatile, the stock should be in consideration for a place in any long-term investor's portfolio.
