Chip stocks crushed by Samsung selloff and AI delays — double down on Nvidia at multi-year lows
The entire semiconductor sector is getting crushed due to weak earnings from Samsung and delays in Nvidia's new AI hardware. However, Nvidia's massive sell-off has now pushed its valuation to the cheapest levels since before the AI boom, setting up a potential rebound.
Idea
Samsung's disappointing earnings have triggered a massive selloff across memory and chip stocks, dragging the whole sector down. At the same time, fears over manufacturing delays for Nvidia's next-gen AI servers have fueled a $1 trillion plunge in Nvidia's market value. However, combining this panic with the news that Nvidia's stock is now trading at its cheapest valuation relative to earnings in years—despite bringing in record revenue—suggests the selling has become disconnected from fundamentals. While the broader chip sector might continue to bleed, Nvidia's extreme drop and fundamental revenue strength create a contrarian buying opportunity.