Chip Stocks Fall Due to AI Spending Doubt
In brief
- Chip stocks have fallen due to doubts about AI spending.
- Nvidia stock has fallen about 18% from its 52-week high.
- The decline may be a chance to buy quality at a discount.
- Nvidia's revenue jumped 85% year over year to $81.6 billion.
- This growth may continue as management guided for second-quarter revenue of $91 billion.
- Nvidia trades at about 29 times earnings, which is not a demanding price for a company growing this fast.
- The stock's risk is the one weighing on the whole sector, if AI spending cools, Nvidia's growth could normalize quickly, and the company will look to the future for new opportunities.
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