The AI revolution has helped bring in a new wave of growth for Nvidia over the last two years.
Investors have largely cheered on Nvidia as the company has consistently generated record results.
However, since February the stock has slipped -- calling into question whether investors have moved on.
It's been a really interesting year in the stock market so far in 2025. At one point, the S&P 500 had dropped as low as 15% while the Nasdaq Composite cratered by 21%.
While news of Chinese artificial intelligence (AI) start-up DeepSeek and mixed economic indicators have made some impacts on the capital markets this year, I think the biggest contributors to the volatility (by far!) are the new tariff policies from the Trump administration. Although the S&P 500 and Nasdaq have recovered from their low points, both indexes still feature negative returns on the year -- with some of the biggest laggards being megacap technology stocks.
As I write this, Nvidia(NASDAQ: NVDA) has lost nearly $1 trillion in market value so far in 2025. Indeed, such a sell-off would suggest that investors have soured on the formerly red-hot semiconductor darling. With its fiscal first-quarter earnings report scheduled for May 28, is now a good time to buy the dip in Nvidia stock?
Read on to find out what history says should happen after the company publishes its first-quarter report later this month.
What does history suggest will happen to Nvidia stock after May 28?
The chart below illustrates Nvidia's share price movement over the last three years. The purple circles with the letter "E" in the center indicate earnings reports. For the majority of the last few years, Nvidia stock has climbed immediately following an earnings report. At a high level, this would suggest that Nvidia stock could be positioned to continue its winning streak.
Unfortunately, there's one major nuance to call out before assuming Nvidia stock will rise once again. The most notable exception to Nvidia's post-earnings jolts occurred back in February when the company reported financial results for the fourth quarter and full 2024 year. Since the company reported earnings on Feb. 26, shares have dropped by 13% as of this writing.
There are a lot of factors at play influencing Nvidia stock right now
Although the precipitous drop-off in Nvidia stock since the company last reported earnings might be a little jarring, there are some important details to discuss.
The earnings report itself was anything but a problem. The main event back in February was Nvidia's new Blackwell GPU architecture. During the fourth quarter, Blackwell outperformed management's internal estimates by bringing in $11 billion in revenue.
What's even better is that Nvidia's management said it believes the company's gross margin will improve throughout the year as the Blackwell ramp-up continues to scale. Moreover, management touted a line of successor GPU architectures including Blackwell Ultra and Rubin, which I'm confident should help Nvidia maintain robust growth prospects over the next several years.
With so much good news surrounding Nvidia's actual business, why has the stock been selling off for months now? As I alluded to above, uncertainty around tariffs combined with new export controls around the Chinese market (an important source of revenue for Nvidia) have investors worried about the company's growth. While I understand these concerns, I think they are overblown.
Image source: Getty Images.
What should investors look for during the Q1 call?
As an investor, I will be listening closely to how the secular trends fueling AI infrastructure are impacting the company's long-run prospects relative to near-term headwinds in China and the tariff environment.
Over the last couple of weeks, investors have gotten a glimpse of other leading AI businesses and how they are navigating the ongoing tariff-driven turbulence. Meta Platforms, Alphabet, Amazon, and Microsoft have all reported earnings for the first calendar quarter of 2025. One thing stitching these companies together is their collective focus on AI infrastructure. On a combined basis, these companies are planning on spending hundreds of billions of dollars this year on data center buildouts.
To me, if tariffs were a longer-term concern or mission-critical issue for business then big tech companies would not be doubling down on their AI roadmaps right now. Given that all of these companies are Nvidia customers, I think the chipmaker remains in a position of strength and will extinguish any investor fears about long-term growth. As a result, I think Nvidia stock could beat expectations and begin to attract growth investors once again.
I see Nvidia as a good buying opportunity right now for growth investors who intend to hold the stock for the long term.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Adam Spatacco has positions in Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
