AI chip stocks have sold off sharply, and Nvidia (NASDAQ:NVDA) is no exception. Nvidia stock fell by 10% with major semiconductor stocks following fears about an AI slowdown. It’s unclear if last week’s sell-off signifies the end of “AI mania” or a temporary setback. Even if AI chip stocks decline, NVDA may not be affected.

Don’t get me wrong. The sell-off may continue in the immediate-term, given the current direction of investor sentiment. Still, it may not be long before the recovery begins. From there, with the stock now more-than-reasonably priced, shares could have a substantial amount of rebound runway.

Why Nvidia Stock Sold Off More Sharply Than its Rivals

Following the aforementioned re-emergence of fear, uncertainty, and doubt about future AI chip market growth, the market bailed on AI chip stocks, high and low-quality alike. With this, it’s not surprising or out of line that sentiment shifted for NVDA in such a sharp way.

That’s not all. It’s also not surprising that declines for Nvidia stock that day exceeded declines experienced by key rivals. Advanced Micro Devices (NASDAQ:AMD) shares declined by just 5.44% that day. Intel (NASDAQ:INTC) shares fell by just 2.4%.

A big reason Nvidia tumbled to a greater extent may have to do with growing concerns that these peers are making big progress playing catchup with this AI chip early-mover. Per the market’s current view, if AMD and Intel become more formidable AI chip competitors, this too will have a severe impact on future growth for Nvidia.

However, just the cause the market holds this view today, doesn’t mean it will hold it for long. Pretty soon, present worries could prove to be an overreaction.

After that, NVDA could end up not not bouncing back from this latest round of losses, but continue to bounce back to its high-water mark, and beyond.

Plenty in Play for a Strong Recovery

So, after a leap lower, how does Nvidia stock get back on an upward trajectory from here? Admittedly, weakness may continue in the immediate term. Over the next few weeks, AMD and Intel, as well as other semiconductor names, will report quarterly results.

Any sort of negative aspect to the results themselves, or with guidance, could drive yet another sector-wide sell-off. However, there is a silver lining. NVDA is in an advantageous position for earnings.

The AI chip leader’s next earnings release isn’t until May 22. If results from AMD and Intel disappoint, expectations may be further walked back for Nvidia.

This could set the stage for Nvidia to surprise the market with its latest results and guidance. As has happened before, shares could surge sharply following the earnings release. Better yet, the company has a lot on its side that can keep competition, from both chip rivals as well as its own customers, at bay.

In the months ahead, it could be more apparent that these factors are helping to sustain high market share and elevated levels of growth. In turn, this may result in a material re-rating for NVDA.

The Verdict: Feel More Than Free to Buy

Based on recent results from one of Nvidia’s chip manufacturing partners, AI chip demand remained robust during Q1 2024, and is poised to stay robust during Q2 2024. This further calls into question recent “AI slowdown” worries.

Despite rising competition, numerous analysts remain confident that Nvidia will continue to dominate the AI chip market. For instance, B of A still argues that, even once rivals catch up, Nvidia will still have a 75% market share in AI accelerators, which could eventually become a $90 billion per year industry.

At just 30.6 times forward earnings, NVDA is definitely in growth-at-a-reasonable-price territory. Shares could steadily climb back in tandem with earnings growth, perhaps even to a greater extent, thanks to multiple expansion.

In short, now’s not the time to shun Nvidia stock. Instead, feel more than free to seize on the opportunity.

Nvidia stock earns an A rating in Portfolio Grader.

On the date of publication, Louis Navellier had a long position in NVDA. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.