Nasdaq Sell-Off: After Losing Nearly $800 Billion in Market Cap, Is Nvidia Stock a Buy Anymore? History Offers a Clear Indicator of What Could Happen Next.

On Jan. 6, shares of semiconductor powerhouse Nvidia (NASDAQ: NVDA) closed at an all-time high of $149.43. At the time, the company's market capitalization hovered around $3.7 trillion.

But these highs were fleeting. Throughout 2025, a wicked mixture of new tariff policies, mixed economic data, unknowns about the Federal Reserve's ongoing policies, and even an emerging artificial intelligence (AI) start-up out of China called DeepSeek have contributed to an epic sell-off in Nvidia stock.

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As of this writing, its market cap is $2.9 trillion -- down $800 billion from highs seen just a couple of months ago. With investors souring on Nvidia, is the stock still a buy? Let's dig in and find out.

Nvidia's business actually looks solid

About a month ago, Nvidia reported earnings for its full fiscal 2025 (ended Jan. 26). Once again, the company's computing and networking segments were the shining stars. Those two segments make up most of Nvidia's business, capturing the company's graphics processing units (GPUs), which are an increasingly important component for AI data centers.

The entire data center business generated $115 billion in revenue, up 142% year over year. Within this category, sales from computing soared by 162% while the company's networking business rose by 51% year over year.

During the fourth quarter, data center revenue reached its highest level on the year at $35.6 billion, nearly double the fourth quarter in the prior year. One of the major contributors at the end of the year was the highly successful launch of its next-generation GPU architecture, called Blackwell.

Image Source: Nvidia.

Macro trends should be a bellwether for Nvidia

A number of influential players in the AI realm have recently started sharing their spending plans, which could help shed some light on Nvidia's prospects.

For example, Apple announced that it will be investing $500 billion over the next four years into areas including silicon engineering and manufacturing. And Taiwan Semiconductor Manufacturing -- which makes Nvidia chips -- is expanding its footprint in the U.S. with its own $100 billion infrastructure investment.

Lastly, cloud computing hyperscalers Amazon, Microsoft, and Alphabet are all committing to increase capital expenditures, forecasting more than $250 billion of AI infrastructure spending just in 2025 alone.

While each of these companies has its own priorities, all of them work closely with Nvidia in some form or fashion -- from manufacturing to outfitting their data centers with chips. Given the nearly $1 trillion of infrastructure spending planned for the next several years, I see its growth prospects as highly compelling.

Is Nvidia stock still a buy?

As I've written before, I use Nov. 30, 2022, as my start date for the AI revolution. This is the day that OpenAI commercially released ChatGPT. Since that date, Nvidia stock has risen by 615%. Given gains of this magnitude, you might be inclined to think that its best days are behind it.

NVDA Market Cap data by YCharts.

However, the chart above shows an interesting trend. Although the stock has risen considerably over the last few years, there have been some notable dips. And yet, as the chart makes clear, sell-offs in the stock are generally brief, and it historically rebounds to new highs.

I think that even with its parabolic gains, the stock is poised to bounce back. What's even better is that shares are trading for a historical discount right now. The company's forward price-to-earnings multiple (P/E) of 26.7 is well below its three-year average and 47% off its high over this period.

NVDA PE Ratio (Forward) data by YCharts.

Considering that the business is operating at record levels, the secular tailwinds suggesting that the company remains positioned to capture rising AI infrastructure spending, and the stock's historical resiliency, I think now is a great opportunity to take advantage of the sell-off and buy Nvidia shares while they are on sale.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Adam Spatacco has positions in Alphabet, Amazon, Apple, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.