The Nasdaq Just Hit Correction Territory: This Magnificent AI Stock Is a Rare Bargain

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Keithen Drury, The Motley Fool

Wed, Mar 12, 2025, 10:15 AM 5 min read

The Nasdaq scale is present successful correction territory, meaning it is present much than 10% down from its all-time high. While this whitethorn look similar a large deal, 10% corrections thin to hap conscionable astir each year, truthful this is thing that investors indispensable recognize happens rather frequently.

Because this happens regularly, investors shouldn't panic; instead, it's clip to commencement looking for bargains that could beryllium adjacent much heavy deed than the broader market. My biggest worth to bargain close present is Nvidia (NASDAQ: NVDA), 1 of the champion artificial quality (AI) stocks retired there. At this writing, it's down astir 30% from its all-time precocious and looks similar a dirt-cheap bargain.

Nvidia makes graphics processing units (GPUs), which are utilized for arduous computing tasks. Because they tin process aggregate calculations successful parallel, they are good suited for tasks similar AI training. While determination are different competitors successful the GPU space, Nvidia's options are superior successful aggregate ways, and it has go the wide prime successful this space.

With companies investing billions successful their AI infrastructure, Nvidia has go the superior beneficiary of this spending, which has caused its banal to rocket higher implicit the past fewer years. At its peak, Nvidia's banal was up 922% since the commencement of 2023. That's an unthinkable run, and it's 1 of the main reasons wherefore the banal is being sold disconnected truthful aggressively. Investors privation to instrumentality profits earlier they disappear, truthful this sell-off disproportionately affects Nvidia. However, plentifulness of tailwinds are pushing Nvidia higher, and investors request to instrumentality vantage of the biggest sell-off the banal has seen since its tally began successful 2023.

2025 is slated to beryllium a grounds twelvemonth of superior expenditures from galore of the large tech companies. The immense bulk of this disbursal is going toward gathering retired AI computing capacity, which volition payment Nvidia. Furthermore, Nvidia's latest spot architecture, Blackwell, is starting to go much wide available, which means immoderate clients whitethorn beryllium upgrading their existing GPUs with much precocious versions.

These are each affirmative effects for Nvidia's stock, and they adhd to Wall Street's projection that Nvidia's gross volition emergence 56% to $204 cardinal this year. However, the large caveat present is that it volition necessitate large tech companies to proceed spending a batch of wealth to scope that projection. The fearfulness is that economical weakness brought connected by commercialized wars could origin these AI hyperscalers to chopped their spending, which would harm Nvidia.