There has been a rotation into value and smaller-cap stocks this year, with both groups outperforming the S&P 500 and Nasdaq-100 indexes so far in 2026. Tech stocks have been hit particularly hard.
First, the market came after software-as-a-service (SaaS) stocks on fears of how artificial intelligence (AI) could potentially disrupt their business models. The sell-off later extended to the hyperscalers over concerns that these companies were spending too much money building out data center infrastructure. Finally, it started hitting the semiconductor space. At this point, the AI stock trade that has powered the market for much of the past three years has broken down.
However, that doesn’t mean the overall AI boom is over. In fact, it still very much looks like it is in its early innings. That’s why if I had $1,000 available to invest in one stock right now, it would be Nvidia (NVDA +0.77%).
Image source: Getty Images.
A great company at an even better price
Great companies rarely go on sale, but when they do, investors are generally rewarded. And make no mistake, Nvidia’s stock is on sale right now. Down more than 20% from its highs, the stock now trades at a forward price-to-earnings (P/E) ratio of below 20 times this year’s fiscal year analyst estimates and under 15 times next year’s consensus. That is for a company that just grew its revenue by 73% year over year for the quarter ended Jan. 25, 2026, and projected that its revenue growth would accelerate in its fiscal first quarter of 2026.
Nvidia is a growth machine, and with AI infrastructure spending set to exceed $700 billion this year, the company is likely to see another strong year of exceptional growth. That is not why you want to buy the stock, though. One reason why the market has been selling off Nvidia’s stock is that it is fearful that the demand for AI infrastructure will soon peak. In my view, this seems unlikely.
Today’s Change
(0.77%) $1.34
Current Price
$175.74
Key Data Points
Market Cap
$4.3T
Day’s Range
$174.76 – $177.37
52wk Range
$86.62 – $212.19
Volume
24K
Avg Vol
181M
Gross Margin
71.07%
Dividend Yield
0.02%
One major misconception is that once top AI models are trained, spending will slow. However, more companies look ready to jump into the competition to build top-tier models, like Amazon and Microsoft, and as AI usage grows, the need for computing for inference also will soar. Moreover, there will likely be a secondary wave of demand after U.S. hyperscalers as sovereign AI demand surges. Finally, there is natural replacement cycle with AI chips, and agentic AI brings with it more potential growth opportunities.
Why you should buy Nvidia
The reason to buy Nvidia is that the company has shown the ability to see future trends and evolve as few others have. First, it saw the market opportunity in AI well before anyone else, and smartly pushed its CUDA software platform into places doing early research, creating a wide moat for its graphics processing units (GPUs) in AI data centers. It then saw the need for improved data center networking to support its GPUs, so it bought Mellanox in 2020, and today, networking is its fastest-growing segment. More recently, it “acquired” Groq to be better able to go after the inference market and SchedMD to help introduce an agentic AI platform.
That’s why Nvidia is the stock you want to scoop up when the market is shaky.
