Wall Street recently has been gravely concerned that high-flying technology stocks are on the cusp of a big reckoning.
After two years of market-trouncing returns, technology stocks have sold off sharply because of worries tied to arguably sky-high valuations and the potential IT budgets will peak.
The market wrecking ball has been indiscriminate. The S&P 500 retreated about 10% from its highs, while the tech-laden Nasdaq 100 tumbled about 13%. The pain has been more significant in big-cap technology stocks like Nvidia.
The Roundhill Magnificient Seven ETF (MAGS) has tumbled 18% since mid-December. Nvidia, the poster child for the technology rally in 2023 and 2024, is down more than 20% from January's peak.
Nvidia's status as the leading company benefiting from the artificial intelligence revolution has made it a staple in many investors' portfolios. As a result, the recent drubbing has left many investors wondering what could happen to Nvidia's stock next.
This point isn't lost on Louis Navellier, a veteran stock picker who has been navigating the stock market since the 1980s.
Navellier, who founded Navellier & Associates, a firm with about $1 billion in assets under management, recently weighed in on Nvidia's tumble. His opinion will likely turn some heads.
Chief Executive Jensen Huang has seen Nvidia's share price soar on surging AI demand.Shutterstock
A tidal wave of AI spending put Nvidia in the spotlight
No other company has benefited as much from the rise of artificial intelligence as Nvidia (NVDA) .
The company sells graphics-processing units, or GPUs. These are better suited to handling the heavy workloads associated with training and operating large language AI models and agentic AI software programs than traditional central processing units found in most computer networks are.
Legacy servers have been quickly upgraded with Nvidia's high-end semiconductors as companies rush to unlock AI's potential. That's particularly evident within the world's largest cloud-data-service providers, including Amazon's AWS, Microsoft's Azure, and Alphabet's Google Cloud.
These three so-called hyperscalers plowed $191 billion into their businesses in 2024, up from $117 billion in 2023. Much of that increase in spending targeted Nvidia's silicon, including the H100, H200 and, most recently, the next-generation Blackwell GB200 chips.
Nvidia gets top dollar for those chips, so sales and profit have rocketed. The GB200, described as a superchip, reportedly costs more than $60,000, and a full rack with 72 of them can clock in at nearly $3 million.
In 2024, Nvidia sales totaled $130 billion, up 114% from 2023. And thanks to margins wider than 70%, a lot of that money flowed to the bottom line. Its net income was about $73 billion in 2024, up 145% from 2023.
CEO Jensen Huang struck a bullish tone during Nvidia's fourth-quarter conference call.
"We successfully and incredibly ramped up Grace Blackwell, delivering some $11 billion of revenues last quarter," he said. "We're going to have to continue to scale as demand is quite high, and customers are anxious and impatient to get their Blackwell systems. The demand for Blackwell is extraordinary."
Nvidia stock takes a drubbing
Given Nvidia's growth, its 171% return in 2024 isn't too surprising.
Arguably, however, the rapid runup priced the shares to perfection, setting up the risk of a selloff on anything other than great news.
In January, the Chinese AI company DeepSeek shocked the AI industry when it launched an AI chatbot to rival OpenAI's ChatGPT and Google's Gemini.
The company claimed it developed its large language model for just $6 million using older-generation Nvidia chips, rather than Nvidia's pricey Blackwell chips, which aren't available in China because of export restrictions.
The potential to create AI solutions more cheaply caught Nvidia shareholders flat-footed, sending Nvidia's stock price reeling as investors wondered whether AI spending was about to reset lower.
Analyst sees major Nvidia catalyst at GTC Conference
Navellier is a longtime Nvidia bull. He bought shares in 2019 and has championed them ever since, including in February. As of December, his 13F filing showed he owned $80 million of Nvidia stock, representing its biggest position.
"No one can compete with Nvidia," said Navellier on Yahoo Finance's Opening Bid podcast last month. "You should hold Nvidia until the end of the decade."
Navellier's confidence in Nvidia is rooted in its dominant position within AI semiconductor chips. Nvidia's market share for those chips is about 90%.
He's unfazed by the recent drop in Nvidia's stock price.
"Nvidia has a 70% operating margin," said Navellier in his YouTube podcast on March 9. "That's the biggest thing I've ever seen, so I'm just not worried about it."
Navellier says investors won't have to wait too long to be reminded of Nvidia's potential. Nvidia's GTC conference for AI developers begins March 17. He says it could reenergize Nvidia, especially regarding its opportunity in quantum computing.
"Nvidia had a contest on who could design the best quantum computing parameters, and they'll be interviewing some of those companies," said Navellier. "It's going to be very exciting. I obviously expect Nvidia not only to lead AI, I expect them to be a quantum-computing leader as well."
What about the negative impacts of tariffs? He views the impact of tariffs on the AI chip story as noise.
"There's a lot of rumors that tariffs are going to cause the economy to implode, and there's going to be a black hole, and all the chip stocks are going to go down it, and it's false, it's blatantly false," said Navellier.
"It's clickbait they use to manipulate stock prices. I'm really looking forward to that videoconference to shut everybody up."
