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.
Make volatility your friend
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.
Is Nvidia stock a buy right now?
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.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
- Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $244,570!*
- Apple: if you invested $1,000 when we doubled down in 2008, you’d have $35,715!*
- Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $461,558!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
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*Stock Advisor returns as of April 5, 2025
Howard Smith has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
