Nvidia is now cheaper than it was before the AI boom while Apple just locked in $30B for chips — time to buy the dip
Nvidia has lost roughly $1 trillion in value over a short period, making its stock price relative to its earnings the cheapest it has been since before the AI boom started. Meanwhile, Apple just committed $30 billion to Broadcom for chips, proving that massive demand for silicon remains incredibly strong despite the recent fear in the tech sector.
Idea
Bloomberg highlights that Nvidia's recent $1 trillion slide has pushed its valuation back to pre-AI boom levels, suggesting the selling may be overdone. Separately, news of Apple's massive $30 billion deal with Broadcom demonstrates that underlying demand for high-end chips is still accelerating, not slowing down. Furthermore, CNBC notes that smart traders are already betting on a snap-back rally for Nvidia as the rest of the chip sector takes a beating. The combination of extreme fear pricing on Nvidia and massive confirmed spending in the sector creates a compelling bounce-back opportunity.
Advanced Analysis — institutional-depth research report
Verdict: A Real Dip-Playing Strategy — But Every Entry Gate Is Far From Firing
The idea earns a wait, not a buy: the ruleset is well-defined and has a genuine scoreboard, but every entry condition is flagged far from trigger right now. NVDA closed at $218.81 with its 14-day RSI at 44.6 — about 9.6 points above the 35 threshold — and its 1-day change at -2.4% against a required +1% pop; AVGO's mirror readings are similarly distant. The strongest point for the idea is the completed 60-month daily backtest: 19 trades, a 63.2% win rate, roughly 135% cumulative return, and an 18.4% maximum drawdown — though exits were filled on daily bars, so fills are coarse. The strongest point against is the most recent ownership filing (quarter ended June 30, 2026): net open-market insider selling of about $565 million at NVDA and $283 million at AVGO, plus a CNBC-reported crowd already positioned for the same bounce (July 7, 2026). The demand-side thesis is real — NVDA's fiscal 2026 revenue grew 65.5% to $215.9B with $96.7B in free cash flow, and the Apple-Broadcom deal cited in the thesis is concrete — but fundamentals don't shorten the wait. The verdict flips to actionable only when the RSI condition and the same-day confirmation pop actually align.
Trade now: two checks stand between you and this dip-buy
This is a patience trade today. NVDA closed at $218.81 with its 14-day RSI at 44.6 — the entry requires an RSI at or below 35, so the oscillator is about 9.6 points too high. The second condition is a same-day pop: the 1-day rate of change must be above 1%, but it currently prints -2.4%. AVGO's mirror conditions are also far from firing, with RSI at 43.5 and a 1-day change of -1.0%. Nothing is close: both entry gates are flagged far from trigger on both tickers. Once an entry does fire, the exits are fully specified. Each position carries a hard stop at a 2.5% loss and a take-profit at a 4.9% gain, an effective reward-to-risk of roughly 2-to-1, plus a price-based stop below the 78.6% retracement level and a target at the nearest resistance level — for NVDA that nearest overhead resistance sits at $220.54. Position sizing is capped at 25% of the book per name under a fixed-risk scheme. The evidence behind the setup is a completed backtest: over five years of daily bars on NVDA the rules produced 19 trades, a 63.2% win rate, a 135% cumulative return, and an 18.4% maximum drawdown. Note that exits in that test were filled on daily bars rather than intraday, so stop and target fills are approximate. What "wait" means concretely: no position until the RSI condition and the confirmation-day up-move align — chasing before that is not the strategy.
Buying the Panic Has Been Paid — Here Is the Test
The completed backtest gives the thesis a real scoreboard rather than just a narrative. Over a 60-month daily window, the rules produced 19 completed trades with a 63.2% win rate and a total return of about 135%, while the 24-month window alone returned roughly 29.3% on 7 trades at a 71.4% win rate. Shorter recent windows thin out — the 12-month test turned only about 1.3% on 2 trades — so much of the result was earned through the 2023–2026 cycle of AI-driven drawdowns and recoveries, which is precisely the regime the idea expects to repeat.
The Crowd Is Already Buying This Dip
The bear case starts with the crowd itself: CNBC reported on July 7, 2026 that traders were already positioned for a big Nvidia rally while the chip sector sold off. When a bounce thesis is this consensus, the marginal buyer may already be in — and the same fear metric that creates entries (Nvidia's 14-day RSI falling below 35) can simply re-test and cut you out repeatedly in a grinding downtrend.
Company context
### AVGO **Ownership and insiders.** For…
Scores
- Conviction score breakdown: 61
- Thesis support: 72
- Trade readiness: 25
- Risk quality: 60
- Backtest evidence: 70
- Fundamentals trend: 78
Watch items
- NVDA — RSI (14)
- NVDA — 1-day rate of change
- AVGO — RSI (14)
- AVGO — 1-day rate of change
- NVDA — Price at nearest support
- NVDA — Insider net open-market activity
- AVGO — Insider net open-market activity