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The Nasdaq index is now in correction territory, meaning it is now more than 10% down from its all-time high. While this may seem like a big deal, 10% corrections tend to occur just about every year, so this is something that investors must understand happens quite frequently.
Because this happens regularly, investors shouldn't panic; instead, it's time to start looking for bargains that could be even more heavily hit than the broader market. My biggest value to buy right now is Nvidia (NASDAQ: NVDA), one of the best artificial intelligence (AI) stocks out there. At this writing, it's down nearly 30% from its all-time high and looks like a dirt-cheap bargain.
Nvidia's stock is going through the biggest drawdown during its multiyear run
Nvidia makes graphics processing units (GPUs), which are used for arduous computing tasks. Because they can process multiple calculations in parallel, they are well suited for tasks like AI training. While there are other competitors in the GPU space, Nvidia's options are superior in multiple ways, and it has become the clear pick in this space.
With companies investing billions in their AI infrastructure, Nvidia has become the primary beneficiary of this spending, which has caused its stock to rocket higher over the past few years. At its peak, Nvidia's stock was up 922% since the start of 2023. That's an incredible run, and it's one of the main reasons why the stock is being sold off so aggressively. Investors want to take profits before they disappear, so this sell-off disproportionately affects Nvidia. However, plenty of tailwinds are pushing Nvidia higher, and investors need to take advantage of the biggest sell-off the stock has seen since its run began in 2023.
Nvidia will be all right even if the market has its doubts
2025 is slated to be a record year of capital expenditures from many of the big tech companies. The vast majority of this expense is going toward building out AI computing capacity, which will benefit Nvidia. Furthermore, Nvidia's latest chip architecture, Blackwell, is starting to become more widely available, which means some clients may be upgrading their existing GPUs with more advanced versions.
These are all positive effects for Nvidia's stock, and they add to Wall Street's projection that Nvidia's revenue will rise 56% to $204 billion this year. However, the big caveat here is that it will require big tech companies to continue spending a lot of money to reach that projection. The fear is that economic weakness brought on by trade wars could cause these AI hyperscalers to cut their spending, which would harm Nvidia.