Nvidia (NVDA) has been on a remarkable run, with its stock price surging over 600% since the start of 2023. However, recently, shares have taken a beating, slipping about 16% year-to-date and falling 8% in recent earnings report. The company’s revenue growth and adjusted earnings per share (EPS) were solid, but investors may be feeling fatigue.
The sell-off has sparked concerns over Nvidia’s chips being exported to China, as well as President Donald Trump’s new tariffs. However, a closer look at the stock’s history reveals that this is not the first time it has experienced a significant downturn. In fact, Nvidia has had two major drawdowns in the last decade, both of which were followed by a strong rebound.
In 2018 and 2022, Nvidia’s stock plunged 50% or more due to various market pressures, including rising interest rates, slowing demand for semiconductors, and a crash in cryptocurrency mining. However, each time, the stock was able to recover quickly, with prices reaching all-time highs within about a year and a half.
Looking ahead, Nvidia’s strong competitive advantage in the data center graphics processing units (GPUs) that make up the backbone of AI applications should continue to drive growth. The company’s demand for its new Blackwell chips remains high, and cloud computing giants are increasing spending on capital expenditures this year. With a forward price-to-earnings (P/S) ratio of 25, Nvidia looks like it’s trading at a discount, making it an attractive buy despite the recent sell-off.
Source: https://www.fool.com/investing/2025/03/07/nvidia-stock-down-27-from-peak-history-says-this