Key Points

• Investors fear more restrictions on advanced semiconductor exports are coming.

• Nvidia's valuation is now reasonable for this high-growth company.

Nvidia shares plunged again to start the trading week, down nearly 9% on Monday.

Nvidia, the leader in artificial intelligence (AI) advanced chips and software architecture, released another strong quarterly report last week, but its stock has plunged more than 13% since then. And while its share price soared in 2024, it's now trading below its levels from six months ago.

Investors should understand what's driving the negative sentiment that contributed to Nvidia's post-earnings slump. Here's why now may be the chance to act for those who might have felt they'd missed out on owning Nvidia shares last year.

Fears of a slowdown may be overblown

Nvidia's recent drop stems from investors' fears that export controls may be coming for high-performing AI chips. Restrictions are already in place that limit Nvidia's most powerful chips from being exported to China. But the semiconductor sector is now being rattled by The Wall Street Journal's report this weekend that Nvidia's latest Blackwell chips are being offered in China through companies in other Asian countries. That has investors fearing other countries -- including Singapore, Vietnam, and others -- could be added to a sanction list for Nvidia's highest-powered chips.

But I think Nvidia stock's decline does look like a buying opportunity. First, Nvidia has long been battling fraud and transshipments by bad actors as it works to adhere to U.S. export rules.

Second, the company beat expectations for revenue growth once again in its recent fiscal fourth quarter. Revenue soared 114% for its full fiscal year. And the company predicts another record for revenue in the current quarter.

While revenue growth may slow this year, sales -- and earnings -- should continue to increase. And the stock is now valued at about 26 times the next 12 months' expected earnings. That's well below its three-year average of 35 times. That makes now a good time to buy this high-growth stock.