Nvidia (NVDA +0.64%) isn't just any stock. And May 20 isn't just any date.
With a market cap of $5.3 trillion, Nvidia ranks as the largest component in the S&P 500 (^GSPC 0.16%). The GPU maker holds considerable sway over how the overall market performs. That's especially the case for artificial intelligence (AI) stocks. May 20 is an important date for Nvidia because it's when the company is scheduled to announce its fiscal year 2027 first-quarter results after the market closes.
Nvidia's stock could make a big move by May 20. Here are three things smart investors are doing now.
Image source: Nvidia.
1. Remaining disciplined rather than chasing momentum
Nvidia's guidance projects Q1 revenue of $78 billion, plus or minus 2%. The consensus Wall Street view is for the company to deliver revenue of roughly $78.8 billion with adjusted earnings per share of $1.77. Based on its track record, Nvidia is likely to beat these expectations.
Investors appear to be anticipating good results from Nvidia. The GPU stock has rebounded from a recent pullback and is now hovering around its all-time high. If Nvidia reports exceptional Q1 numbers and, more importantly, provides a surprisingly bullish outlook, its shares could surge following the quarterly update.
NASDAQ: NVDA
Key Data Points
However, smart investors are remaining disciplined rather than chasing momentum. They know that buying solely because of FOMO (fear of missing out) isn't a wise strategy. Emotion-driven trading usually doesn't work out very well.
Does this mean these smart investors aren't buying Nvidia shares ahead of its May 20 update? Not necessarily. What it does mean, though, is that they aren't loading up on the stock just because they think the Q1 numbers will be better than expected. Instead, experienced investors understand the wisdom of scaling into positions as opposed to making one huge one-time purchase.
2. Focusing on long-term growth
Even if smart investors anticipate stellar results from Nvidia, they remain focused on the company's long-term growth instead of a quarterly snapshot. The good news is that Nvidia's long-term growth prospects remain bright.
Nvidia's GPUs continue to enjoy strong demand due to multiple tailwinds. Hyperscalers are building out their AI infrastructure. Countries are investing in sovereign AI. Agentic AI is gaining traction.
The company is also poised to benefit from AI trends happening outside of data centers. For example, Nvidia is a leader in hardware and software used in advanced robotics. Its autonomous vehicle technology is used by leading automakers, including BYD (BYDDF 1.62%) (BYDDY 2.00%), General Motors (GM +1.53%), Mercedes-Benz (MBGYY +0.00%), and Volvo (VLVLY 1.34%). Nvidia is also a key "picks-and-shovels" provider to quantum computing companies.
3. Keeping some cash ready to capitalize on volatility
Smart investors also know that Nvidia's stock could be highly volatile, regardless of how strong Nvidia's results are. They keep some cash in reserve so they can capitalize on this volatility.
Nvidia's share price has occasionally fallen after a quarterly update, even when the company handily beat Wall Street expectations. Investors sometimes take profits off the table. Other times, Nvidia tops the official analyst estimates but comes in short of the so-called "whisper numbers." Should history repeat itself, smart investors will be prepared to take advantage of a temporary post-update decline.
Prediction versus patience
There's a pretty good chance, though, that Nvidia will make a big move by May 20 (or in the days after the company's Q1 update). Buying the stock hand over fist now could pay off quickly.
However, smart investors know that it's impossible to accurately predict the future. They agree with Charlie Munger (one of the smartest investors of all time), who said, "The big money is not in the buy and selling... but in the waiting." Patience is almost always a better investing strategy than predictions -- especially with a stock like Nvidia.
