Huang's Discount Advice: Nvidia CEO Urges Investors to Buy During AI Stock Sell-Off

Nvidia CEO Jensen Huang recently advised investors to 'buy at a discount' during the AI stock sell-off in May, when Nvidia's stock dropped nearly 15% and other major players like Alphabet and Amazon fell by around 11%. The sell-off was triggered by investor concerns over the valuation of AI stocks.

Huang made his comments while in Seoul for business meetings, including a partnership with South Korean memory chipmaker SK Hynix to design next-generation AI memory chips. He emphasized that the recent market downturn presented an opportunity for investors to purchase AI stocks at a lower price.

If investors had taken Huang's advice and bought Nvidia stock on June 8, they would have seen a gain of around 5.1% since then, while the S&P 500 has risen by only 4.3%. However, if one were to invest in a basket of AI stocks including equal parts Nvidia, Google, Amazon, and Microsoft, the returns would be even more impressive, at around 8.5%, almost double the S&P 500's gain.

Huang believes that the recent spending on AI is just the tip of the iceberg and predicts solid long-term gains for AI companies over years, not months. While some might be tempted to sell their AI stocks now while they're beating the market, holding onto them for the long term may be the best move.