Jensen Huang Told Investors in June to 'Buy at a Discount' During Nvidia's Sell-Off. Nearly Three Months Later, Nvidia Is Up 4%, and a Broader AI Basket Gained 8%. Did His Call Pay Off?
Investors probably shouldn't read too much into a CEO hyping his own company's stock over the short term.
Overview
It is a CEO's job to put the company they run in the best light possible in every circumstance. So it shouldn't be surprising that Jensen Huang, the CEO of Nvidia (NASDAQ: NVDA), told investors to buy Nvidia stock amid a broader pullback in artificial intelligence (AI) stocks. That said, since his call, Nvidia is up just about 4%, as of this writing. That's not great compared to this alternative AI investment approach. Should you worry?
Huang made his "buy" call roughly three months ago. Since that point, his company's stock has been up 4%. An investment in the S&P 500 index (SNPINDEX: ^GSPC) would have returned about the same amount. So, it is hard to suggest it was a bad call. However, if you had put equal amounts into Nvidia, Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), and Alphabet (NASDAQ: GOOG), creating a diversified artificial intelligence basket, you'd have benefited from an 8% gain. So it is hard to suggest Huang's call was a winner, either.
Image source: Nvidia Corporation.
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Originally published at www.fool.com.