Why This Time Will Not Be Different for Nvidia Stock

In three sessions beginning last Thursday, Nvidia (NASDAQ:NVDA) stock lost 17% of its value. However, investors shouldn’t panic.

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After all, we’ve been here before. It was just six months ago that the market as a whole was plunging. My advice then was simple: take the long view. In turn, investors who kept that focus, kept their cool and focused on high-quality stocks were rewarded.

September hardly looks like March, but I’ll admit the last few sessions have been nerve-wracking. The tech-heavy NASDAQ Composite dropped an even 10% over the same three trading days. As noted, NVDA stock has done even worse.

But Nvidia stock, too, has been here before. In the February/March selloff, it declined 38% in less than four weeks. By May, it had regained the losses — and shortly after, reached new highs.

An investor can go back to late 2018 as well. Fears of a “crypto hangover” and another market-wide rout led the stock to drop by more than half in less than three months. Investors did need some patience then, as it took NVDA more than a year to reach new highs. But any investor who bought the dip has done exceedingly well — even if they were early.

That’s already true in the early going, as both tech and Nvidia stock rallied on Wednesday. And looking forward, I simply don’t believe this time will be any different. Overall, NVDA stock is a buy on the dip this time, just as it has been in the past.

Valuation Concerns

The primary driver of the recent selloff appears to be concerns about valuation in the markets — particularly for 2020’s gainers. From a broad standpoint, I’m somewhat sympathetic to those concerns.

After all, we have seen a massive rally since

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