The cryptocurrency bubble has since collapsed, erasing a big chunk of demand for graphics cards and putting the industry into a state of oversupply. 1, 2021, shares of NVIDIA and AMD were up 339% and 173%, respectively.ĭid those rallies make sense? Only if you believed the frenzied pandemic-era demand was the new normal. Graphics card prices went through the roof as cryptocurrency miners snapped them up, and PC sales surged to their highest level since 2012. But they are certainly not clear-cut bargains. It's an open question whether these two stocks are good long-term investments at their current prices. Both stocks are down around 60% from their all-time highs. NVIDIA ( NVDA 0.13%) and Advanced Micro Devices ( AMD -0.27%), two semiconductor stocks that were soaring until late 2021, have seen much of those gains come undone as chip shortages have given way to chip gluts. Combine dimming growth prospects with a frothy valuation, and you have the recipe for a nasty decline that would have been unthinkable when new all-time highs were being carved out daily. It doesn't care about what happened in the past. The stock market doesn't care what your cost basis is. There's nothing stopping a stock that's fallen 60% from falling another 60%. Sometimes it takes many years for it to claw its way back. Sometimes a stock collapses and never recovers. In reality, no one knows what the 'correct' price is. You might find yourself saying something like: 'My stock is down 60% it's so cheap!' Here's the problem with that line of reasoning: It assumes that the peak is the 'correct' price. One of the most dangerous traps an investor can fall into during a bear market is anchoring.

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