Nvidia’s Stock Struggles Amid Market Volatility: A Historical Perspective

Investors have come to link Nvidia (NASDAQ: NVDA) with remarkable stock performance, and rightfully so. The company’s shares have surged over 2,000% in the last five years, enabling investors to gain substantial returns spurred by the booming artificial intelligence (AI) sector, which has driven revenue to unprecedented heights.

However, Nvidia’s stock price has not always followed a smooth upward trajectory. Recently, the shares have dipped 16% in the past month, while the tech-heavy Nasdaq index has entered correction territory, down 10% from its December peak due to concerns over President Trump’s tariffs impacting the market.

As investors digest the implications of increased costs on imported goods, fears mount about pressure on corporate earnings and consumer spending. This has led to a temporary exit from high-growth stocks.

The pressing question now is how long Nvidia’s stock will remain in a downturn. To answer this, examining Nvidia’s history after previous declines can provide valuable insights.

Image source: Getty Images.

A Glimpse at Nvidia’s Evolution

Nvidia went public in 1999 at a modest price of $12 per share, primarily focusing on the video games and graphics market with its advanced chips. Over the years, the company has diversified its offerings significantly, now providing products and services across various industries. AI has emerged as a key growth driver, with data center revenue accounting for nearly 90% of total revenue in the most recent quarter.

To understand Nvidia’s resilience, it’s imperative to analyze its performance during past setbacks, particularly since 2018. In that year, Nvidia’s stock fell due to concerns about tariffs and diminishing demand for graphics cards used in cryptocurrency mining, leading to a 31% decrease overall, mainly in the last quarter. However, by January 2019, Nvidia rebounded and finished the year positively despite experiencing some volatility.

NVDA data by YCharts.

Nvidia’s Recovery and Growth

During the COVID-19 market crash in February and March 2020, Nvidia’s stock followed the broader market downward, yet it sprang back in April, concluding the year with a remarkable 121% increase. This rebound was fueled by an explosive rise in data center revenue, up 124% during the fiscal year, driven by the burgeoning AI trend.

NVDA data by YCharts.

In 2022, Nvidia encountered challenges alongside the Nasdaq due to soaring inflation and rising interest rates, leading to an unfortunate 50% decline that year, underperforming compared to the Nasdaq.

NVDA data by YCharts.

However, 2023 marked a dramatic turnaround for Nvidia, which saw its stock soar over 800% from the beginning of the year through the end of last year. This surge was driven by robust earnings, with both revenue and net income skyrocketing into triple digits quarterly, thanks to the accelerated AI boom.

Long-Term Prospects and Investor Patience

Nvidia’s historical performance highlights its ability to bounce back rapidly after downturns. Even after challenging periods such as in 2022, the company has ultimately rewarded long-term investors. This trend might indicate that recent stock declines could be temporary, although economic uncertainty may pose ongoing challenges.

Despite the current volatility, Nvidia’s long-term growth outlook remains robust. The AI market is poised for explosive expansion, and major tech enterprises continue investing significantly in Nvidia’s offerings. This commitment to innovation should reinforce the company’s leading position in the sector. Consequently, even if Nvidia’s stock experiences a prolonged slump, it retains the potential to excel in terms of both earnings and stock performance in the long run.

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*Stock Advisor returns as of March 18, 2025

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.