Nvidia (NVDA +5.93%) has its annual (and sometimes biannual) GTC event this week in San Jose, California. It runs from March 17 to March 21. The developer conference is primarily focused artificial intelligence and will include hundreds of sessions and exhibits on related topics such as computer vision, autonomous robots, and quantum computing.
Importantly, CEO Jensen Huang will deliver a keynote speech that should shed light on the company's product roadmap and market opportunity. Should investors buy Nvidia stock before GTC 2025 ends? History offers a surprising answer.
NASDAQ: NVDA
Key Data Points
Nvidia stock has historically performed poorly in the month following GTC
Jensen Huang made several important product announcements at GTC 2024. The headline innovation was the Blackwell graphics processing unit (GPU), a chip that recently entered production. But Huang also introduced new data center networking platforms built for artificial intelligence (AI), and software tools that streamline the development of generative AI and robotics applications.
Despite those updates, Nvidia stock sold off sharply during the month following GTC 2024. That may surprise some readers, but it actually fits the historical pattern. Investors have typically sold the news following Nvidia's last five GTC conferences, as shown in the chart below.
|
End of Nvidia GTC Event |
1-Month Return |
|---|---|
|
April 16, 2021 |
(10%) |
|
March 24, 2022 |
(31%) |
|
September 22, 2022 |
(1%) |
|
March 23, 2023 |
0% |
|
March 21, 2024 |
(17%) |
|
Average |
(12%) |
Data source: YCharts.
Nvidia stock almost always declined during the month following its last five GTC events, and shares tumbled by an average of 12% during that period.
However, GTC 2025 may be different because most Wall Street analysts already see the stock as undervalued. Nvidia's median target price of $175 per share implies 45% upside from its current share price of $120. Also, Jensen Huang may provide updates on headwinds like DeepSeek's innovations and chip export restrictions, and reassurances on those issues could send shares higher.
Of course, investors should never make decisions based solely on what could happen in the next month. The market can be irrational over short periods, but tends to reward high-quality businesses over long periods. I think Nvidia meets the definition of "high-quality business."
Nvidia is a sensible investment no matter what happens after GTC 2025
The investment thesis for Nvidia is straightforward: The company dominates the market for data center GPUs, chips that have become the industry standard in AI accelerators. And AI accelerator spending is projected to increase at 29% annually through 2030, according to Grand View Research.
Importantly, growing demand for generative AI has been central to the investment thesis since the launch of ChatGPT in late 2022. But generative AI is only a stepping-stone on a longer path that will ultimately reshape the world. And Nvidia's capacity for innovation should keep it at the forefront of the AI revolution.
Jensen Huang earlier this year at CES introduced Nvidia Cosmos, pretrained foundation models for physical AI systems like autonomous cars and humanoid robots. Cosmos supplements Nvidia's data center hardware and software development tools to form a full-stack robotics solution. "The ChatGPT moment for robotics is coming," Huang told attendees.
Wall Street estimates Nvidia's earnings will grow at 39% annually through fiscal 2027, which ends in January 2027. By comparison, the present valuation of 40 times earnings looks downright cheap. I think that's because the market is worried DeepSeek's cost efficient model training techniques will cause AI infrastructure spending to slow.
Here is the bottom line: Investors should avoid short-term thinking, but using historical data to your advantage is perfectly acceptable. In this case, Nvidia stock tends to perform poorly after GTC events, but most analysts already think the stock is oversold. So, investors should split the difference. Buy a small position before GTC 2025 ends, then add shares in a few weeks if the price is still reasonable.
