Nvidia, Nasdaq 100 Dip Buy After AI Selloff

For investors, the selloff matters because it hits the market’s most important engine of earnings growth and index performance. When the biggest AI names fall hard, passive funds, momentum traders and crowded long-only portfolios all feel the impact, while the broader market loses a major source of leadership.

Morgan Stanley strategist Mike Wilson has been among the more constructive voices, arguing that the correction has created fresh entry points after the Nasdaq 100’s sharp retreat. The call fits a familiar Wall Street pattern: when sentiment turns oversold, strategists often look for technical and valuation support to rebuild positions before the next leg higher.

The technical backdrop now looks stretched enough to support that argument, even if volatility remains elevated. The S&P 500 ETF SPY is trading below its 50-day moving average, with its RSI reading near 45, while Nasdaq-heavy QQQ has fallen to around 680 from above 740 earlier in the year and remains below key trend levels after a violent summer and autumn shakeout.

Nvidia has been hit much harder. The stock has slid to 162.85 from 235.20 in mid-May, and its RSI has dropped to 19.1, a reading that typically signals deeply oversold conditions. The magnitude of that decline has fueled debate over whether AI spending is peaking too fast or whether the market is simply repricing a still-intact growth story.

The split view on AI is now the central market narrative. Bears point to overinvestment, debt exposure and the risk that hyperscale capital spending fails to translate quickly enough into profits, while bulls argue that the long-term buildout in chips, cloud infrastructure and model training remains intact and that the recent washout is offering better entry levels.

That tension is visible in the way investors are treating individual names. Some AI-related stocks have been crushed, but CoreWeave surged nearly 25% after strong third-quarter results and a decision by its chief executive to cancel planned stock sales, a sign that selective earnings strength can still attract buyers even as the broader group sells off.

The stakes extend beyond tech. A sustained rebound in AI could help stabilize U.S. equities into year-end, support risk appetite and ease recession fears that have flared alongside the correction. If the selloff deepens, it would threaten the S&P 500’s leadership and keep pressure on valuations for semiconductors, cloud providers and other growth stocks that had powered the rally.

For now, the message from strategists is that the damage may be enough to create opportunity rather than confirm a bust. The next test is whether upcoming earnings from AI-heavy companies can show that demand, margins and cash generation are still strong enough to justify another leg higher.