Market pros split over Nvidia's slide: rare opening or reason to wait
Investors are divided on Nvidia: one calls the depressed price a once-a-decade opening, another says re-examine the thesis, and a third says buying after a drop suits diversified holdings, not single stocks.
A divided Wall Street
Professional investors are split on what to do about Nvidia after Thursday's slide. By 2:30 p.m., the shares were down more than 5% on the day and sat 31% below their high on October 6, CNBC reported. The company is valued at about $4 trillion, and its quarterly results are due November 17.
There is no consensus. One voice frames the fall as a rare opening, another says investors should re-examine their thesis before acting, and a third argues the classic case for buying on weakness applies to diversified holdings, not to a single stock.
The case for the opportunity
Michael Monaghan, a portfolio manager at the Founders 100 ETF, which invests in founder-led companies, said there was no successor to a generational founder, and that a founder's vision, execution and grit were not replaceable. His fund must exit Nvidia under its own rules, yet he argued that buying the company's projected growth at its depressed price was a chance that comes once a decade, or once in a career.
Monaghan pointed to Bain & Company data showing founder-led companies vastly outperformed their peers from 1990 to 2014. Even Apple and Microsoft, after successful founder replacements, grew more slowly than under their original leaders, he noted.
- Nvidia by 2:30 p.m. ThursdayDown more than 5%
- Below the October 6 high31%
- Market valueAbout $4 trillion
- Revenue expected Nov. 17$108.9 billion, up 91%
The case for waiting
Tom Hainlin, national investment strategist at U.S. Bank Asset Management, urged investors to ask whether the resignation changed the reason they bought the stock, a question he said had no definitive answer. If a position is large enough that a pullback keeps an investor up at night, he said, it may be worth paring back. One thing is clear, he added: demand for AI has not changed.
Jeff Buchbinder, chief equity strategist at LPL Financial, said buying on weakness was attractive for solid, long-term investments, because every dip in the S&P 500 has eventually led to new highs. The article stressed that individual stocks carry no such record. Analysts expect Nvidia's revenue to rise 91% from a year earlier to $108.9 billion when it reports on November 17, according to LSEG.
