Nvidia's stock entered a bear market on Thursday as the selloff in technology stocks escalated. Portfolio managers quoted by MarketWatch say demand for AI chips should hold up, and see a buying opportunity ahead of the company's earnings report.
Nvidia's stock entered a bear market Thursday afternoon as the selloff in technology stocks escalated. A bear market is defined as a fall of 20% or more from a recent peak.
The chip maker ended the day down 9.3%, its largest percentage decrease since January 2025, according to Dow Jones Market Data. Shares have lost 24.1% from their record close on Oct 6.
Nvidia loses $447 billion in market cap after the midterms
Nvidia also lost $447 billion in market capitalization Thursday, its second-largest one-day decline, the data showed. Following the midterm elections, investors have been worried that Democrats will put up more roadblocks to data-center expansion.
Michael Monaghan, a portfolio manager at Founder ETFs, told MarketWatch that investors were sorting through the economic reality where the AI buildout is the driver of the economy. He attributed the day-to-day volatility to hedge funds trading with high leverage and tighter risk limits. Those traders have to pull out quickly as shares fall, which can lead to larger intraday moves, he said, but the market can also turn around just as fast.
Portfolio managers see a buying opportunity
Monaghan said Nvidia's revenue is expected to grow 70% next year. Despite concerns over a halt to data-center construction, he said building will likely continue, so demand for chips should remain strong. Going into Nvidia's earnings report later this month, he sees a buying opportunity given how battered the stock has been.
David Wagner, a portfolio manager at Aptus Capital Advisors, told MarketWatch that Nvidia is trading more cheaply because investors worry about how intertwined its earnings are with AI infrastructure spending that could eventually slow down. If investors believe AI will be a multi-year buildout, he said, the decline "looks more like a valuation reset than a broken thesis".
Source: MarketWatch
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