Nvidia: A Spot of Bother or a Golden Opportunity?

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Nvidia, you see, has been something of a star performer lately – a positively ripping success, what! Over the past three years, the shares have ascended to heights that would make a Himalayan peak look like a gentle slope. A rather dazzling performance, wouldn’t you agree? It’s hardly surprising, really, considering their dominance in the frightfully important realm of AI chips. They’ve been delivering revenue growth at a pace that leaves one breathless, and investors, naturally, have been rather keen to get a slice of the action. A perfectly understandable enthusiasm, all things considered.

Now, one finds oneself pondering the rather vexing question of timing. After such a climb, one naturally wonders when, precisely, to acquire a few shares. Is there a particularly propitious moment lurking just around the corner? Should one, perhaps, leap before looking, and purchase ahead of their earnings report on February 25th? Let’s have a bit of a look at the history, shall we? It might shed a glimmer of light on the proceedings.

Nvidia’s Recent Escapades

First, a quick recap of the past year. The stock has, indeed, climbed, but not in a perfectly straight line, you understand. There have been a few wobbles along the way, a bit of a dip here and a slight shudder there. Despite these minor inconveniences, Nvidia has continued to churn out spectacular revenue, all while maintaining a positively robust profit margin – over 70%, if you please! Rivals have emerged, naturally, and some have even shown a bit of pep, but they haven’t managed to ruffle Nvidia’s feathers in the slightest. The demand for these AI chips is so prodigious, you see, that there’s room for a good many players. Nvidia’s chips, being rather brilliantly engineered, remain the mainstay of most major AI platforms.

Late last year, however, a spot of bother arose. Whispers of an “AI bubble” began to circulate, causing a momentary flutter amongst investors. A touch dramatic, perhaps, but it did exert a temporary downward pressure on the stock. Naturally, everyone kept a watchful eye on AI spending trends, fearing a potential slowdown. A perfectly reasonable precaution, one might say.

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But the news from the tech giants has been reassuringly buoyant. They continue to splash out on AI infrastructure with admirable abandon, and chip designers and cloud providers are experiencing a positively explosive surge in demand. This has, in turn, given a lift to many AI stocks, including our friend, Nvidia, which has rebounded nicely from its November lows. So, Nvidia, and a good many of its peers, still appear to be rather sound investments.

Now, back to our original conundrum: when to buy? The upcoming catalyst is Nvidia’s fiscal fourth-quarter earnings report, due on February 25th, after the market has had its tea.

A Word from the Chip Foundry

There’s a reason to be optimistic, you see. Taiwan Semiconductor Manufacturing, the chaps who actually make Nvidia’s chips, recently reported earnings that exceeded expectations. A dashedly clever performance, what! And when they do well, it bodes well for Nvidia, naturally.

Let’s examine Nvidia’s past performance after earnings reports. Over the last eleven quarters, the stock has declined six times in the week following the announcement and climbed five times. A rather mixed bag, wouldn’t you say? In the last six quarters, it’s only advanced once – a modest 5% gain last June. A bit of a lackluster record, all things considered.

Earnings report Stock performance over the following week
Q2 fiscal 2025 down 15%
Q3 fiscal 2025 down 7%
Q4 fiscal 2025 down 10%
Q1 fiscal 2026 up 5%
Q2 fiscal 2026 down 6%
Q3 fiscal 2026 down 3%

And, as mentioned, recent reports have been rather strong, with Nvidia consistently beating estimates and delivering record revenue. Yet, even this hasn’t propelled the stock upwards in the short term. A curious state of affairs, wouldn’t you agree?

Therefore, history suggests there’s no need to rush into buying Nvidia ahead of the earnings report. These announcements haven’t historically triggered an immediate surge in the stock price.

Now, here’s a bit of good news. Even if the stock experiences a decent move after a particular event, it won’t make much difference in the long run. If you hold the stock for an extended period, a few days of fluctuation will seem rather insignificant. The key, you see, is to acquire shares of a quality company when the valuation looks reasonable and then simply hang on for dear life. If you do that, you’re likely to emerge victorious.

And that means you might see rather significant gains over time if you buy Nvidia now – or after February 25th. A perfectly sound strategy, wouldn’t you say?

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2026-02-02 14:52