Nvidia’s Jensen Huang Says Chip Stock Selloff Is a Buying Opportunity

NVIDIA (NASDAQ: NVDA) CEO Jensen Huang dismissed concerns surrounding last week’s sharp semiconductor sector selloff, describing the decline as a buying opportunity rather than a sign of weakening demand for artificial intelligence technologies.

Speaking on Monday, Huang emphasized that the AI industry remains in its early stages of development and that the long-term growth story for artificial intelligence is still firmly intact.

“We are at the outset of the AI revolution,” Huang said, arguing that the recent market correction reflects short-term investor positioning rather than any deterioration in the fundamental outlook for AI-related spending.

Semiconductor Stocks Suffer Worst Selloff Since 2020

The semiconductor sector experienced severe selling pressure on June 5, recording its worst single-day decline since March 2020.

The selloff erased more than $1 trillion in market value across chipmakers and technology companies. Nvidia shares alone fell 6.2% during the session, losing $13.56 per share.

Two major factors contributed to the sharp decline.

First, a stronger-than-expected U.S. employment report showed the economy added 172,000 jobs in May, significantly exceeding analyst forecasts. The data fueled concerns that the Federal Reserve may keep interest rates elevated for longer or potentially consider additional rate hikes.

Second, Broadcom’s latest AI-related guidance disappointed investors, raising questions about whether the technology sector can sustain the aggressive capital spending assumptions currently built into market expectations.

Analysts See Positioning Rather Than Fundamental Weakness

Several Wall Street strategists have supported Huang’s view that the correction is largely technical rather than fundamental.

Wells Fargo Chief Equity Strategist Ohsung Kwon argued that semiconductor stocks had become heavily overbought after months of strong gains.

According to Kwon, the recent decline reflects profit-taking and portfolio rebalancing rather than the end of the semiconductor industry’s bullish cycle.

“The semiconductor sector was way overbought. That’s why we’re seeing the selloff. I don’t think it’s the end of the semi bull market,” Kwon said.

UBS Remains Positive on Technology Fundamentals

UBS Global Wealth Management Chief Investment Officer Mark Haefele also maintained a constructive outlook for the technology sector.

While acknowledging recent concerns surrounding elevated expectations, Haefele noted that the underlying business fundamentals of major technology companies remain strong.

The comments suggest that many institutional investors continue to view the recent weakness as a market adjustment rather than a fundamental shift in the AI investment theme.

Some Analysts Warn of Bubble-Like Conditions

Not all market observers share the optimistic outlook.

Several analysts have warned that the recent volatility resembles conditions seen during the late stages of the dot-com bubble.

Some market commentators cited by Fortune suggested that current AI-driven valuations could face increasing pressure if interest rates remain elevated and revenue growth fails to justify investor expectations.

Comparisons to the 1999 technology bubble have resurfaced, raising concerns that portions of the AI trade may have become excessively speculative.

Semiconductor Stocks Rebound Ahead of the Market Open

Despite the recent selloff, semiconductor stocks showed signs of recovery on Monday.

Ahead of the opening bell, S&P 500 futures were higher by 0.9%, while Nasdaq 100 futures gained 1.9%.

Among major chipmakers, Nvidia advanced 2.7% in premarket trading. Broadcom rose 3.3%, while Micron Technology surged 8.3%.

Although Nvidia has recovered part of its recent losses, the stock remains below its 52-week high of $236.54, leaving significant room for further upside should investor confidence return.

Outlook

The debate surrounding the semiconductor sector remains centered on whether the recent correction represents a healthy reset or the beginning of a deeper valuation adjustment.

For now, Nvidia CEO Jensen Huang remains firmly in the bullish camp, arguing that artificial intelligence adoption is still in its early innings and that the recent selloff may offer investors an attractive opportunity to gain exposure to one of the market’s most important long-term growth themes.