Nvidia Shares: A Potential Buying Opportunity Amid Recent Decline
Historically, every time Nvidia (NASDAQ: NVDA) has seen its shares fall by 30% or more, it has proven to be a favorable buying opportunity for investors. This trend may be repeating itself.
After a decline of up to 37% from its peak earlier this year, Nvidia has shown strong signs of recovery. Investors may wonder if it’s too late to partake in this rebound. I believe it is not. Here are three compelling reasons to consider purchasing Nvidia stock before May 28.
1. Consistent Earnings Beats Signal Potential Growth
Why focus on May 28? That’s the date Nvidia plans to announce its first-quarter results for fiscal year 2026, ending April 27, 2025. Quarterly updates often serve as catalysts for stock movement.
Investors may be optimistic about this upcoming Q1 update, given Nvidia’s track record of surpassing Wall Street earnings estimates for the previous four quarters by at least 5% each time.
While beating expectations doesn’t always guarantee a rise in share price—Nvidia reported adjusted earnings per share (EPS) of $0.89 against analysts’ expectations of $0.85 for the fourth quarter of fiscal 2025 and still experienced a share price drop—this pattern could change. Many investors are eager for renewed confidence in Nvidia’s stock. A positive earnings surprise may provide the momentum they seek.
2. Positive Indicators from Major Clients
Although past performance doesn’t assure future results, recent comments from several major clients indicate a potentially favorable outcome for Nvidia.
During Amazon’s Q1 earnings call, CEO Andy Jassy mentioned that Amazon Web Services (AWS) is actively implementing Nvidia AI chips alongside its own Trainium chips, stating, “[A]s fast as we actually put the capacity in, it’s being consumed.” He anticipated deploying “a lot more” of Nvidia’s next-generation GPUs in the coming months.
Image source: Nvidia.
Additionally, Microsoft is expanding its data center capacity, indicating that demand for AI services is outpacing available resources, according to CFO Amy Hood. This situation is promising for Nvidia’s supply chain.
Moreover, Google’s CEO Sundar Pichai emphasized the strong partnership with Nvidia during his company’s Q1 earnings call, stressing that Google Cloud was the first to offer Nvidia’s latest GPUs to its customers and plans for further collaborations.
3. Extraordinary Demand for Blackwell GPUs
On the subject of new product releases, Nvidia CEO Jensen Huang expressed that the demand for Blackwell GPUs is “extraordinary.” CFO Colette Kress pointed out that they generated $11 billion in Blackwell revenue to meet this demand, marking the fastest product ramp in the company’s history.
As Nvidia prepares to report fiscal Q1 results, Blackwell will likely feature as a significant highlight. Kress anticipates a “significant ramp” in Blackwell sales during Q1, with more positive updates expected regarding upcoming product launches.
Potential Caution Before Buying Nvidia Stock
Even with reasons to invest, caution is warranted before purchasing Nvidia stock before May 28. Ongoing tariffs and trade policies under the Trump administration introduce uncertainty, particularly regarding Nvidia’s operations.
The recent easing of tensions with China may not be as optimistic as some investors perceive. While tariffs are temporarily reduced, the existing 30% tariffs on imports from China remain, as do 10% tariffs on U.S. goods from China.
Even if Nvidia outperforms earnings expectations, unfavorable trade conditions could impede stock performance in the short term. However, prospects for Nvidia over the long term remain promising. If you invest today and hold for five to ten years, there is potential for substantial gain, regardless of short-term fluctuations.
Conclusion: A Potential Second Chance for Investors
For those who feel they missed prior opportunities with high-performing stocks, now may present a chance to engage.
Our analysts occasionally issue “Double Down” recommendations for select companies poised for growth. If you’re concerned about missing out, this might be an opportune moment to buy.
*Returns as of May 12, 2025
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keith Speights has positions in Alphabet, Amazon, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Nvidia.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
