By Geoffrey Seiler
Publication Date: 2026-04-02 09:55:00
There has been a rotation into value and smaller-cap stocks this year, with both groups outperforming the S&P 500 and Nasdaq-100 indexes so far in 2026. Tech stocks have been hit particularly hard.
First, the market came after software-as-a-service (SaaS) stocks on fears of how artificial intelligence (AI) could potentially disrupt their business models. The sell-off later extended to the hyperscalers over concerns that these companies were spending too much money building out data center infrastructure. Finally, it started hitting the semiconductor space. At this point, the AI stock trade that has powered the market for much of the past three years has broken down.
However, that doesn’t mean the overall AI boom is over. In fact, it still very much looks like it is in its early innings. That’s why if I had $1,000 available to invest in one stock right now, it would be Nvidia (NVDA +0.77%).
Image source: Getty Images.
A great company at an even better price
Great companies rarely go on sale, but when they do, investors are generally rewarded. And make no mistake, Nvidia’s stock is on sale right now. Down more than 20% from its highs, the stock now trades at a forward price-to-earnings (P/E) ratio of below 20 times this year’s fiscal year analyst estimates and under 15 times next year’s consensus. That is for a company that just grew its revenue by 73% year over year for the quarter ended Jan. 25, 2026, and projected that its revenue growth would accelerate in its fiscal…