TLDR
- Nvidia shares gained approximately 2% Monday following a 6.2% Friday decline
- Jensen Huang encouraged investors to view the pullback as an opportunity to “buy at a discount”
- The chipmaker unveiled a multiyear memory technology collaboration with SK Hynix for AI systems
- Nvidia and SK Telecom announced plans for gigawatt-scale AI cloud infrastructure across South Korea and Asia
- The stock’s forward P/E ratio has declined to 20.16 times from approximately 26 times previously
Nvidia’s stock price advanced roughly 2% during Monday’s morning session, reaching $209.10 per share, as the chipmaker rebounded from Friday’s 6.2% decline. The semiconductor giant was among numerous chip manufacturers hit hard last week after Broadcom delivered disappointing forward guidance and mounting interest rate anxiety pressured the sector. Friday’s market turmoil erased approximately $1 trillion in technology sector market capitalization and pushed the Nasdaq Composite index down 4%.
During a weekend visit to Seoul, South Korea, Nvidia’s CEO Jensen Huang met with business partners and addressed the recent market volatility head-on when speaking with media representatives.
“Whatever happened to the stock market, you should be very happy because now you can buy at a discount,” Huang told reporters.
Huang further emphasized that the market correction should make investors “excited,” highlighting his conviction that artificial intelligence development remains in its infancy and presents compelling long-term investment prospects.
Strategic South Korean Partnerships Unveiled
During his Seoul visit, Nvidia formalized two significant partnerships with prominent South Korean technology firms.
On Sunday, Nvidia and SK Hynix revealed a multiyear strategic collaboration. The partnership will focus on co-developing advanced memory chip technologies specifically designed for next-generation AI infrastructure requirements.
The following day, SK Telecom disclosed an agreement with Nvidia to construct gigawatt-scale AI cloud computing facilities throughout South Korea. The telecommunications company and Nvidia also outlined ambitions to extend these cloud services to additional Asian markets.
SK Telecom’s American depositary receipts climbed approximately 2.9% Monday morning, rebounding after an 8.7% Friday drop.
Nvidia’s Valuation After the Correction
Prior to last week’s selloff, Barron’s had identified Nvidia as an attractive investment when shares traded around $226. At that price level, the company’s forward price-to-earnings multiple stood at approximately 26 times.
Following the market correction, the stock now carries a forward earnings multiple of 20.16 times based on FactSet data. This represents a noticeably compressed valuation compared to just days earlier.
The semiconductor sector’s Friday decline stemmed primarily from Broadcom’s underwhelming guidance, which disappointed certain market participants. Concerns regarding elevated interest rates compounded selling pressure throughout the technology sector.
Nvidia wasn’t the only chip stock regaining ground Monday. The broader semiconductor sector showed renewed strength as Huang’s optimistic remarks circulated through financial markets.
Looking ahead, Oracle’s earnings report scheduled for Wednesday will provide additional insights into enterprise AI spending patterns. Meanwhile, Apple is conducting its annual Worldwide Developers Conference on Monday, where the company may unveil refinements to its artificial intelligence roadmap and introduce an upgraded Siri assistant.
Investors are also anticipating the SpaceX initial public offering scheduled for Friday. The offering could assign Elon Musk’s aerospace company a valuation near $1.8 trillion, potentially establishing it as the largest IPO in market history.
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