Insights

Why Nvidia Stock Is Still Going Down

What happened
Once again — with feeling!
Yesterday, shares of semiconductor specialist Nvidia (NASDAQ: NVDA) got hit on a widespread sell-off of cryptocurrency tokens — and fears the sell-off would impact demand for Nvidia’s graphic processing chips. Today, well, cryptocurrencies are trading lower again. The sell-off isn’t quite as bad as yesterday, but it’s still apparently bad enough to be costing Nvidia shares a 3.8% loss in 1:25 p.m. ET trading.
Image source: Getty Images.

So what
When I say that this time “isn’t quite as bad as yesterday,” it’s still pretty bad. Literally dozens of crypto names have suffered double-digit losses over the last 24 hours, and even brand names like Bitcoin and Ethereum are suffering losses today, albeit not as bad as some of the newer and lesser-known tokens.
Stock investors worry that if the losses don’t stop soon, it might drive crypto investors away from the market… which will depress demand for cryptocurrencies… which will depress mining of cryptocurrencies… which will in turn, finally depress demand for Nvidia’s graphic processing units, which in recent years have been widely repurposed for use in crypto mining.
Now what
Cue Nvidia stock sell-off — just in case that doomsday scenario turns out to be correct.
There is an upside to this downward spiral in Nvidia stock, however — at least if you’re a long-term investor. The more Nvidia’s share price falls, the cheaper the stock gets, so that, if you’ve got confidence in Nvidia’s long-term future, you can own a bigger piece of Nvidia with each dollar you invest.
Why might you want to invest those dollars in Nvidia? Long term, Nvidia thinks it has the potential to grow from its present size of making less than $27 billion in annual sales to many times as large, as it tackles new markets in automotive chips, artificial intelligence, the metaverse, and elsewhere — markets that add up to $1 trillion in future annual sales, according to management.
If you share this vision of the future with Nvidia, today’s sell-off just might look like a buying opportunity.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Nvidia. The Motley Fool has a disclosure policy. –

What happened

Once again — with feeling!

Yesterday, shares of semiconductor specialist Nvidia (NASDAQ: NVDA) got hit on a widespread sell-off of cryptocurrency tokens — and fears the sell-off would impact demand for Nvidia’s graphic processing chips. Today, well, cryptocurrencies are trading lower again. The sell-off isn’t quite as bad as yesterday, but it’s still apparently bad enough to be costing Nvidia shares a 3.8% loss in 1:25 p.m. ET trading.

Image source: Getty Images.

So what

When I say that this time “isn’t quite as bad as yesterday,” it’s still pretty bad. Literally dozens of crypto names have suffered double-digit losses over the last 24 hours, and even brand names like Bitcoin and Ethereum are suffering losses today, albeit not as bad as some of the newer and lesser-known tokens.

Stock investors worry that if the losses don’t stop soon, it might drive crypto investors away from the market… which will depress demand for cryptocurrencies… which will depress mining of cryptocurrencies… which will in turn, finally depress demand for Nvidia’s graphic processing units, which in recent years have been widely repurposed for use in crypto mining.

Now what

Cue Nvidia stock sell-off — just in case that doomsday scenario turns out to be correct.

There is an upside to this downward spiral in Nvidia stock, however — at least if you’re a long-term investor. The more Nvidia’s share price falls, the cheaper the stock gets, so that, if you’ve got confidence in Nvidia’s long-term future, you can own a bigger piece of Nvidia with each dollar you invest.

Why might you want to invest those dollars in Nvidia? Long term, Nvidia thinks it has the potential to grow from its present size of making less than $27 billion in annual sales to many times as large, as it tackles new markets in automotive chips, artificial intelligence, the metaverse, and elsewhere — markets that add up to $1 trillion in future annual sales, according to management.

If you share this vision of the future with Nvidia, today’s sell-off just might look like a buying opportunity.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Nvidia. The Motley Fool has a disclosure policy.

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