Jensen Huang Told Investors in June to 'Buy at a Discount' During Nvidia's Sell-Off. Nearly Three Months Later, Nvidia Is Up 4%, and a Broader AI Basket Gained 8%. Did His Call Pay Off?
Investors probably shouldn't read too much into a CEO hyping his own company's stock over the short term.
In June, Nvidia's CEO Jensen Huang advised investors to purchase Nvidia stock during a sell-off in artificial intelligence (AI) stocks. However, as of now, Nvidia's stock has only risen by approximately 4%, compared to an 8% gain from a broader AI investment approach. This raises the question of whether Huang's recommendation paid off.
Three months have passed since Huang made his "buy" call, and Nvidia's stock has gained 4%. An investment in the S&P 500 index would have returned a similar amount, making it difficult to argue that Huang's call was a poor one. However, if an investor had allocated equal amounts to Nvidia, Microsoft, Amazon, and Alphabet, creating a diversified AI basket, they would have enjoyed an 8% gain. Consequently, it is challenging to definitively claim that Huang's call was a success.
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