TLDR
- Nvidia stock rose about 2% Monday, partially recovering from a 6.2% drop on Friday
- CEO Jensen Huang said the market pullback is a chance to “buy at a discount”
- Nvidia announced a multiyear memory partnership with SK Hynix for AI infrastructure
- SK Telecom and Nvidia agreed to build gigawatt-scale AI cloud services in South Korea and Asia
- Nvidia now trades at a forward price-to-earnings ratio of 20.16 times, down from around 26 times
Nvidia shares climbed roughly 2% on Monday morning, trading at $209.10, after losing 6.2% on Friday. The stock was one of several chip names dragged lower last week following weak guidance from Broadcom and concerns around higher interest rates. The Friday drop was part of a wider selloff that wiped around $1 trillion from tech stocks and sent the Nasdaq Composite down 4%.
Nvidia CEO Jensen Huang was in Seoul, South Korea over the weekend meeting with company partners. Speaking to reporters, he addressed the market drop directly.
“Whatever happened to the stock market, you should be very happy because now you can buy at a discount,” Huang said.
He added that investors should be “excited” about the pullback, pointing to what he called the early stages of AI development as a reason for long-term confidence.
New Deals With South Korean Partners
While in South Korea, Nvidia announced two separate agreements with local companies.
On Sunday, Nvidia and SK Hynix announced a multiyear technology partnership. The two companies said they will work together to develop the next generation of memory chips for AI infrastructure.
On Monday, SK Telecom said it has agreed with Nvidia to develop gigawatt-scale AI cloud services in South Korea. The deal also includes plans to expand those services into other parts of Asia.
SK Telecom’s American depositary receipts rose about 2.9% Monday morning. The stock had fallen 8.7% on Friday.
Where Nvidia’s Valuation Stands Now
Before Friday’s selloff, Barron’s had flagged Nvidia as a stock pick when shares were trading near $226. At that point, the forward price-to-earnings ratio was around 26 times.
After the drop, the stock now trades at a forward earnings multiple of 20.16 times, according to FactSet. That is a lower valuation than the stock carried just days ago.
The Friday selloff in chip stocks was driven largely by Broadcom’s guidance, which fell short of some investor expectations. Rate concerns added to the pressure across the tech sector.
Nvidia was not alone in bouncing back Monday. Other chip stocks also recovered ground as Huang’s comments made their way through markets.
Beyond chips, Oracle earnings this Wednesday will offer another read on AI demand. Apple is holding its annual Worldwide Developers Conference on Monday, which may include updates to its AI strategy and a new version of Siri.
The SpaceX IPO is also expected this Friday. The offering could value Elon Musk’s company at around $1.8 trillion, which would make it the largest IPO on record.
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