Quick Summary
- Nvidia shares gained approximately 2% on Monday, recovering some of Friday’s 6.2% decline
- Jensen Huang told investors the market decline presents an opportunity to “buy at a discount”
- The company unveiled a long-term memory chip collaboration with SK Hynix for AI systems
- Nvidia and SK Telecom plan to develop gigawatt-scale AI cloud infrastructure across South Korea and Asia
- The stock’s forward P/E ratio has fallen to 20.16 from approximately 26 following the recent selloff
Shares of Nvidia advanced about 2% during Monday’s morning session, reaching $209.10, following Friday’s sharp 6.2% decline. The chipmaker was caught in a broader semiconductor sector downturn last week triggered by disappointing forward guidance from Broadcom and mounting concerns over rising interest rates. Friday’s market turbulence erased approximately $1 trillion in value from technology stocks and pushed the Nasdaq Composite down 4%.
During a weekend visit to Seoul, South Korea, Nvidia’s CEO Jensen Huang met with strategic partners and addressed the recent market volatility in comments to the press.
“Whatever happened to the stock market, you should be very happy because now you can buy at a discount,” Huang stated.
Huang emphasized that investors should view the market correction as an exciting opportunity, highlighting that artificial intelligence development remains in its infancy, which supports his optimistic long-term outlook.
Strategic Partnerships Announced in South Korea
During his Seoul visit, Nvidia formalized two significant agreements with major South Korean technology firms.
On Sunday, the company and SK Hynix revealed a multiyear strategic partnership focused on advancing memory technology. The collaboration aims to co-develop cutting-edge memory solutions specifically designed for next-generation AI infrastructure needs.
Monday brought another announcement: SK Telecom revealed plans to partner with Nvidia on building gigawatt-scale AI cloud computing infrastructure in South Korea, with expansion plans targeting broader Asian markets.
SK Telecom’s American depositary receipts climbed roughly 2.9% Monday morning, partially offsetting an 8.7% decline from Friday.
Nvidia’s Updated Valuation Metrics
Prior to last week’s market decline, Barron’s had identified Nvidia as an attractive investment when shares traded around $226. At that level, the forward price-to-earnings ratio stood at approximately 26 times.
Following the selloff, FactSet data shows the stock now commands a forward earnings multiple of 20.16 times. This represents a notably lower valuation compared to just days earlier.
Broadcom’s weaker-than-anticipated guidance served as the primary catalyst for Friday’s chip sector selloff. Growing anxiety about interest rate trajectory compounded selling pressure throughout the broader technology sector.
Nvidia wasn’t the only semiconductor stock recovering Monday. Other chip manufacturers also regained ground as Huang’s optimistic remarks circulated through trading desks.
Looking beyond semiconductors, Oracle’s earnings report due Wednesday will provide additional insight into enterprise AI demand trends. Meanwhile, Apple kicked off its annual Worldwide Developers Conference on Monday, potentially unveiling advances in its AI capabilities and a refreshed Siri assistant.
Also on the horizon, SpaceX is expected to launch its initial public offering Friday. Market observers anticipate the offering could value Elon Musk’s aerospace company at roughly $1.8 trillion, potentially setting a record as the largest IPO in history.
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