Dan Niles, founder of Niles Investment Management, began buying Nvidia Corp. (NASDAQ:NVDA) shares on Tuesday, after starting the session without a position.
Niles said Nvidia’s valuation and broad weakness across semiconductor stocks influenced his decision. Speaking with CNBC’s “Fast Money,” he said Nvidia was trading at about 12 times earnings after declining this year, a valuation he viewed as more attractive following the selloff.
“I don’t know how it gets much more negative than what we saw today on Nvidia,” he said.
He also pointed to mounting political resistance to data centers. Niles said he warned in early October that bipartisan opposition could emerge, but argued the concern had already generated substantial market negativity.
Dan Niles compared Nvidia’s situation to Apple Inc.’s (NASDAQ:AAPL) experience following co-founder Steve Jobs‘ departure and death in 2011, noting that Apple shares still gained 25% that year despite losing its visionary founder. He suggested that a founder’s departure does not necessarily derail a company’s stock performance.
Addressing scrutiny involving Nvidia CEO Jensen Huang, Niles said Huang could potentially be asked to leave. He added that his investment position would change if the underlying facts changed, adding that his approach was not a moral judgment, but an effort to manage positions for risk-adjusted returns.
Nvidia Faces Leadership Uncertainty
The buying comes as investors weigh whether Nvidia’s decline reflects a temporary valuation reset or deeper concerns involving the company’s leadership and AI infrastructure spending. Dan Ives said Nvidia could fall another 30% in a “spy soap opera” scenario involving Huang and an alleged Chinese spy.
He said a potential board investigation could take four to six weeks, keeping Nvidia shares under pressure until more information emerges. He added that Huang’s departure as CEO would fundamentally change Nvidia, with significant ripple effects across the technology sector and AI industry.
On Sunday, CNBC host Jim Cramer said that he expects Nvidia shares to face near-term pressure due to an investigation involving Huang. While he expects Nvidia to report strong earnings on Nov. 17 and believes its data center growth story remains intact, he cautioned that uncertainty surrounding Huang could make the stock “dead money” for an extended period.
Price Action: Over the past month, Nvidia stock has declined 26.34%, as per Benzinga Pro. During Wednesday pre-market, the stock is trading about 5% higher at 177.23.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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