Key Points
Nvidia CEO Jensen Huang urged investors to buy Nvidia stock approximately three months ago, during a broader pullback in artificial intelligence (AI) stocks. Since his recommendation, Nvidia’s share price has risen about 4%, which matches the performance of the S&P 500 index.
In contrast, a diversified AI investment approach comprising Nvidia, Microsoft, Amazon, and Alphabet would have yielded an 8% gain, primarily driven by a 24% increase in Microsoft’s shares. Despite these short-term figures, Nvidia’s fiscal second quarter 2027 results reveal strong demand for AI chips, with revenues up 18% sequentially and 106% year over year, suggesting long-term potential.
Nvidia’s current price-to-earnings ratio stands at 17.5x, below its five-year average of 23x and the S&P 500’s 25x ratio, signaling possible value for long-term investors, despite Huang’s immediate recommendation being less successful compared to a diversified approach.
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