Nvidia Is Finally Cheap: Here’s How to Buy It and Get a 7.4% Dividend
2026-07-16 10:39
•Michael Foster •Investing.com
••••••• •••••• Axe Capital view
Nvidia’s Dip Opens a Rare Window for South African Investors
Nvidia’s recent selloff makes a strong case for selective exposure via USD/ZAR and local proxies like Prosus.
Nvidia’s share price pullback, now trading at a P/E ratio slightly below the S&P 500 average, signals a mispriced opportunity driven by solid AI chip demand. While US semiconductor names dominate, the local angle is key here. Prosus, which holds a large Tencent stake and has significant exposure to global tech trends, often tracks global tech sentiment and could benefit from a tech sector pivot. The rand’s USD/ZAR rate tends to move in sync with risk appetite around tech stocks, offering a tactical FX entry point. With South African banks like Standard Bank still cautious around tech exposures and resources sector not directly tied to semis, this is a niche play for those comfortable with USD/ZAR volatility and Prosus as a proxy. The 7.4% dividend yield on some US tech funds is attractive, but the rand’s weakness could erode returns if USD strength persists. If AI demand disappoints or inflation spikes forcing higher rates, valuations could re-correct further. this is just my opinion and not financial advice
Buy Prosus selectively, using USD/ZAR puts to hedge rand risk, while trimming exposure in broader SA equities. Avoid blindly chasing US semiconductor ETFs given currency headwinds.
- Prosus
- USD/ZAR
- US interest rate surprises
- weaker-than-expected AI chip demand
6/10
The article argues that semiconductor stocks, particularly NVIDIA and Micron, have been unfairly sold off despite strong underlying demand and reasonable valuations. The author recommends the BlackRock Technology and Private Equity Term Trust (BTX), a closed-end fund yielding 7.4% that holds these undervalued semiconductor stocks and is trading at a 13.7% discount to NAV that is narrowing, presenting an attractive opportunity for dividend income and capital appreciation.
This article was originally published by Investing.com and has been adapted here for Axe Capital Trading News.
Publisher: Investing.com
Author: Michael Foster
Categories: Rates, Equities, Earnings, Capital Returns, Technology, AI, Semiconductors
Tickers: NVDA, MU, AVGO, ASML, TXN, SMH
Sentiment: Mixed - Trading at 32.3 P/E ratio, cheaper than S&P 500 average (32.6), with skyrocketing sales growth. Recent selloff is characterized as overblown despite strong AI demand fundamentals. Trading at 22.2 P/E ratio, significantly cheaper than broader market, with exceptional revenue growth. Positioned as undervalued despite recent semiconductor sector decline.
Keywords: semiconductors, AI demand, valuation, dividend yield, closed-end fund, profit-taking, tech stocks, NAV discount
Insights:
- NVDA: Positive: Trading at 32.3 P/E ratio, cheaper than S&P 500 average (32.6), with skyrocketing sales growth. Recent selloff is characterized as overblown despite strong AI demand fundamentals.
- MU: Positive: Trading at 22.2 P/E ratio, significantly cheaper than broader market, with exceptional revenue growth. Positioned as undervalued despite recent semiconductor sector decline.
- TSM: Positive: Reported 67.9% year-over-year sales increase with sold-out capacity on advanced nodes, demonstrating strong AI chip demand and market strength.