Nvidia shares keep falling. Should you buy the dip? #NewsUnitedStates

The rise of Nvidia has been synonymous with Wall Street’s AI boom, but Tuesday’s market sell-off hit the dominant chip maker’s stock the hardest. Nvidia shed $279 billion in market cap, the biggest ever drop for an American company in a single day, before shares fell slightly further on Wednesday.

As Warren Buffett once said, it can pay “to be fearful when others are greedy and to be greedy only when others are fearful.”  Do investors now have a rare opportunity to buy the dip for shares of a fast-growing company that accounted for roughly 30% of the S&P 500’s total returns during the first half of the year?

Even after the plunge, Nvidia’s stock is still up 115% year to date. Analysts, though, have made clear investors should not expect shares—which closed just above the $106 mark Wednesday, down from an all-time high of $140.76 in June—to continue appreciating at the same pace. It is also common wisdom that revenue growth will inevitably decelerate given the eye-popping growth of previous quarters.

View this interactive chart on Fortune.com

To get an idea of why Nvidia’s growth is poised to slow, consider its data center business, which has been the company’s main revenue driver. Revenue from those operations hit a record $26.3 billion this past quarter, up 154% from a year ago. Nonetheless, it was a far cry from the unit’s 427% revenue bump last quarter.

The company is running into the law of large numbers, Angelo Zino, a senior vice president and tech equity analyst at CFRA Research, said in an interview with Fortune before last week’s Q2 earnings release. He urged caution to his clients heading into the call.

“But that said, listen, I mean, when you look at the valuation of this company, it’s trading at a big discount to where it actually historically trades at,” he said.

That message was echoed by Bank of America analysts, a group led by Vivek Arya, even after Nvidia beat expectations in its latest earnings. Arya and his team raised their price target on the stock from $150 to $165. Zino and CFRA maintained its buy rating on the stock, standing pat with a price target of $139 for the year.

As of Tuesday close, Nvidia was trading around 68 times its diluted EPS, per S&P Global Market Intelligence. That’s down from a P/E ratio of 180 last September.

The biggest long-term concern for Nvidia, Zino noted, is what happens when demand, which currently far outstrips supply, begins to dry up. In a tweet Wednesday morning, CNBC’s Jim Cramer said he believed Nvidia’s stock was significantly hurt by a note from Michael Cembalest, the chairman of market and investment strategy at J.P. Morgan Asset Management. Cembalest raised doubts about whether tech giants like Google, Amazon, Microsoft, and Meta will earn adequate returns after spending hundreds of billions of dollars on AI investment.

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In the long haul, Zino believes, the answer is yes.

“Because that’s the kind of shift, the permanent shift we’re going to see,” Zino said. “There are just going to be a lot more AI-enabled devices out there, a lot more connected devices out there. And because of that, you’re going to need a lot more data centers in the future.”

If so, investors who buy Nvidia now might not completely miss the boat.

This story was originally featured on Fortune.com