Nvidia (NASDAQ: NVDA ) It has been the best performing stock every year since 2023. But 2026 looks a little different. Nvidia has not fared well in 2026 and is continuing its slide that began in October 2025. At the time of this writing, it is now about 20% below its all-time high, and some investors are starting to panic.
Nvidia is no stranger to being down a significant amount from an all-time high, and history has a pretty clear indication of what’s likely to happen next. I think this could give investors confidence in Nvidia’s stock, because now is not the time to lose hope.
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Since 2023 (when the artificial intelligence (AI) arms race began), Nvidia has fallen below 20% from its all-time high four times.
Two of those were in back-to-back moments in 2024, the deepest selloff was the tariff-induced panic of 2025, and the fourth is happening now. The reasons behind each sell-off were different, but the result was the same: Nvidia hit a new, all-time high six months later.
But is this time different? I don’t think so.
Two factors are driving Nvidia’s current sell-off. First, the geopolitical instability caused by the war in Iran is negatively affecting market confidence. Investors are less likely to take risks when they are uncertain about the future of the market.
Second, there are growing concerns around the state of AI spending. 2026 is expected to be another year of record capital spending, although the market sees that spending being banked as cash rather than spent on AI. However, we’ve only scratched the surface of what’s possible with AI, and we need a lot more computation. A number of projections indicate that higher AI spending will be required by 2030 to achieve the goals of the AI hyperscaler, with large increases likely after 2026.
However, the market is not pricing in any of that optimism.
Nvidia trades at 19.9 times forward earnings — its cheapest valuation in the past two years. For reference, The S&P 500 Trade for 20.4 times forward earnings. Wall Street expects Nvidia to deliver 71% revenue growth this year and 30% next year, so clearly market-beating growth is high for Nvidia.
I think all of this adds up to support that Nvidia could return to a new all-time high as long as AI spending remains high, which it likely will. This is the best time to buy Nvidia stock, as the bottom is usually when the outlook is most dire.
