As Tech Stocks Churn, Nvidia and Other Semiconductor Plays Look Cheap

It’s been a bumpy start to the year for artificial intelligence stocks, as anxiety about whether massive investments in AI will pay off permeates markets and weighs on some of the hottest names in the sector.

Semiconductor giant Nvidia NVDA traded flat for most of January, and its shares are still recovering from a major selloff earlier this month. The stock is up 3% for the year so far after climbing 38% in 2025. Other heavy-hitters like Advanced Micro Devices AMD have seen their share prices fall even after posting solid earnings.

But as these stocks struggle for purchase, Morningstar senior equity analyst Brian Colello, who covers the semiconductor industry, says fears of a bubble look overdone. He explains why planned spending on AI by hyperscalers like Meta META and Alphabet GOOGL gives him confidence that momentum in the sector can continue, even as markets become more discerning when it comes to the winners and losers of the AI race and as worries about whether OpenAI can deliver on lofty promises persist.

For Morningstar analysts, the recent selloffs in tech stocks have even left some AI plays, once dogged by investor fears of unsustainably high valuations, looking like bargains. “Tech is selling down,” Colello says. “But if you’re willing to have a bit of a longer-term view—or even just willing to go against the grain—we think there are buying opportunities.”

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Nvidia

“We remain highly pleased with Nvidia’s AI road map….