Should I buy more Nvidia stock for my ISA after the DeepSeek-related fall?

Nvidia stock’s just experienced its largest one-day fall in almost five years. Should Edward Sheldon buy more shares after the pullback?

| More on:
Young female analyst working at her desk in the office

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Nvidia (NASDAQ: NVDA) stock’s down significantly this week. On Monday (27 January), it fell a whopping 17%.

While I’ve owned this stock for many years now and it’s a large position for me today, I’ve been toying with the idea of buying a few more shares lately. Is now a good time to do so? Let’s discuss.

Created with Highcharts 11.4.3Nvidia PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Why’s the share price tanked?

First, let’s take a look at what’s going on here. Why has Nvidia’s share price suddenly tanked? Well, this is related to the emergence of DeepSeek, a Chinese generative AI app that’s similar to ChatGPT (and currently the most downloaded app in Apple’s App Store).

Should you invest £1,000 in Associated British Foods right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Associated British Foods made the list?

See the 6 stocks

To build this kind of app, it generally takes a lot of AI chips (or GPUs). In this case, the developer’s used Nvidia’s H800 chips – a scaled down version of its H100 chip (that it exports to China).

What has spooked investors however, is that it’s claimed the cost to develop DeepSeek was just $6m. This is far lower than companies such as OpenAI, Meta and Alphabet have spent to develop their own AI chatbots.

So all of a sudden, investors are recalibrating their expectations for spending on Nvidia’s AI chips in the years ahead. If DeepSeek was built at a cost of less than $6m, maybe AI giants like Alphabet and Meta won’t have to spend tens of billions on Nvidia’s products.

Up until recently, it was assumed that a ton of money would be spent on Nvidia’s chips in the years ahead. For example, Meta recently said that it would spend up to $65bn on AI in 2025.

The outlook may have just changed.

My move now

Given the uncertainty, I’m not going to buy more Nvidia shares just yet. My gut feeling is that I could be about to see a great buying opportunity here.

But I want to let the dust settle first. I also want to do a little more research and hear the opinions of experts in the AI space. Right now, everyone’s still trying to process the very-much-unexpected news (which is why the share price fell so much).

I would also like to see Nvidia CEO Jensen Huang (who I regard as one of the best CEOs in the world) address the issue properly. But with earnings coming up, he may not be able to say much as it’s a ‘quiet period’ right now, meaning that companies aren’t allowed to discuss new information.

It’s worth noting that if we take the current earnings per share (EPS) forecast for the year ending 31 January 2026 ($4.43), the price-to-earnings (P/E) ratio here’s just 29. That strikes me as relatively low.

It’s hard to know if we can trust that EPS forecast right now though (it may be too high). That’s why I’m going to wait a bit and do some more research before snapping up more shares.

But this isn’t the only opportunity that’s caught my attention this week. Here are:

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Ed Sheldon has positions in Apple, Alphabet and Nvidia. The Motley Fool UK has recommended Apple, Alphabet, Meta Platforms, and Nvidia. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on US Stock

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

Up 33% in 2025, this top Warren Buffett growth stock could head even higher! 

Our writer really likes the look of one stock in the portfolio of Warren Buffett's holding company, Berkshire Hathaway.

Read more »

Investing Articles

£10,000 invested in Tesla stock 1 month ago is now worth…

Tesla stock is remarkably volatile for a mega-cap company. While this presents some opportunities for investors, it’s also inherently risky.

Read more »

Investing Articles

Is it too late for investors to consider buying these outstanding FTSE 100 shares?

Stephen Wright wonders whether now's the time to consider buying shares in the FTSE 100’s outstanding companies, despite some high…

Read more »

Middle-aged white man pulling an aggrieved face while looking at a screen
Investing Articles

This growth stock in my SIPP just crashed 33% in 1 day! Should I buy the dip?

Ben McPoland looks at why The Trade Desk (NASDAQ:TTD) shares lost a third of their value inside his SIPP in…

Read more »

Happy African American Man Hugging New Car In Auto Dealership
Investing Articles

1 red-hot stock I love in my Stocks and Shares ISA!

This investor adores one particular high-quality share in his ISA portfolio. So much so, he just can't see himself parting…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

Meta stock is up 17 days in a row! Time to buy this record-setter?

Our writer wonders whether now is the time for him to add Meta stock to his ISA portfolio after its…

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

31% revenue growth! This top growth stock just keeps powering on

Shopify (NYSE:SHOP) smashed it in the fourth quarter, wrapping up an outstanding 2024. But is this growth stock worth considering…

Read more »

Young black man looking at phone while on the London Overground
Investing Articles

Palantir appears to be the ‘new Nvidia’. Should I buy the stock for my ISA?

AI stock Palantir is generating enormous returns for investors at the moment. Should Edward Sheldon buy it for his Stocks…

Read more »