Nvidia experiences price drop and quick recovery: What investors need to know now

The shares of chip manufacturer Nvidia showed a significant decline of more than 6% yesterday, triggered by negative global signals. The sell-off began in Japan after the Bank of Japan raised interest rates, leading to the unwinding of "carry trades" where investors had benefited from the country's low interest rates. Additionally, there was specific news regarding Nvidia that affected its stock price. Despite the drop, some investors used the decline as a buying opportunity, leading to a recovery of the stock by roughly 6% today. Nevertheless, the stock of the advanced semiconductor manufacturer has lost over 15% of its value in recent months. Despite today's increase, Nvidia remains an attractive purchase candidate. Reports of a newly discovered design flaw in Nvidia's upcoming Blackwell AI platform contributed to yesterday's sell-off. Although the company did not confirm any issue, at worst, this could only mean a delay of a few months in Blackwell's launch. Oppenheimer analyst Rick Schafer noted in a new research report that the demand for Nvidia's existing Hopper series H100 chips is sufficient to offset any delays with Blackwell. Schafer reassured some investors: "Nvidia's competitive position remains solid, and we do not expect any significant market share loss due to a minor delay." The robustness of the demand for H100 chips will be in the spotlight for investors when Nvidia releases its next quarterly report on August 28th. Positive comments could help recover losses since the record high in mid-June. Once Blackwell sales are reported, this could further drive the stock price up. Investors are considering acquiring Nvidia shares in light of the recent price decline. Although the stock is expected to remain volatile, it should be considered in a long-term investment strategy. Before you buy Nvidia shares, take note of the following: The analyst team of Motley Fool Stock Advisor has recently identified ten stocks they believe offer the best buying opportunities for investors - Nvidia was not among them. The ten selected stocks could yield immense returns in the coming years. Remember that Nvidia was on this list on April 15, 2005... and if you had invested $1,000 back then, it would be worth $615,516 today! Stock Advisor offers investors a straightforward pathway to success, including guidance on building a portfolio, regular analyst updates, and two new stock tips each month. Since 2002, the service has more than quadrupled the S&P 500's return. * Howard Smith holds positions in Nvidia. The Motley Fool holds positions in and recommends Nvidia. The Motley Fool has a disclosure policy.