Believe it or not, 2024 is almost over. As in the past two years, no company has probably garnered more attention this year than Nvidia. (NASDAQ:NVDA).
This year marks the evolution of Nvidia from just a chapter in the artificial intelligence (AI) storyline to the full author of the story. Nvidia’s influence in AI is so great that nearly every announcement from the company has the power to move entire capital markets.
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There are only a few weeks left until the end of the year, but I can’t let my guard down just yet. At the turn of the new year (January 7th, to be exact), Nvidia will almost certainly dominate the headlines once again.
Let’s examine what’s been happening in early January and assess why now is an important time for Nvidia investors.
From January 7th to 10th, technology enthusiasts, media journalists, and business executives will flock to Las Vegas for one of the biggest conferences of the year, the Consumer Electronics Show (CES).
CES is like Comic-Con, but for techies. This trade show is an opportunity for business leaders to highlight and discuss new product launches in development and how these services will disrupt the next megatrends.
Unsurprisingly, AI is currently the hottest topic in technology. And while I think almost every company will be touting their AI roadmaps at CES, investors will likely focus on Nvidia, the biggest player in this space.
Image source: Getty Images.
Below, we’ve annotated the CES dates from past years and detailed the announcements Nvidia has made during these events. Additionally, we’ve included an analysis of how Nvidia’s stock price has moved after previous CES shows.
CES 2020 (January 7-10): Nvidia showcased G-SYNC displays on laptops made by Asus, Acer, and LG. Nvidia’s stock price rose about 5% a month after the event.
CES 2021 (January 11-14): A new series of video cards for desktop computers called RTX 3060 was announced. Nvidia stock rose about 12% in the month following the event.
CES 2022 (January 5-7): A series of new updates released for G-SYNC and GeForce graphics cards and laptops. Nvidia’s stock price fell about 12% a month after the event.
CES 2023 (January 5-8): First talking point on accelerated computing and how Nvidia is leveraging advances in gaming graphics processing units (GPUs) for more advanced applications in robotics and autonomous driving. Explain how you plan to use it. A month after the event, Nvidia’s stock price rose about 48%.
CES 2024 (January 9-12): Piggybacking off of CES 2023, Nvidia made further announcements about its next-generation GPU lineup, with an increased focus on generative AI. Nvidia’s stock price rose about 36% a month after the event.
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As you can see, from 2020 to 2022, Nvidia was still primarily focused on graphics enhancements made for high-end PCs, namely gaming and esports. It wasn’t until 2023 that Nvidia really started to make strides in its AI craze. Don’t get me wrong, the timing is no coincidence.
OpenAI released ChatGPT on November 30, 2022. Personally, I see the release of ChatGPT as the catalyst that sparked the AI fire. Naturally, Nvidia used CES 2023 as an opportunity to show off its plans to engage in an AI revolution that essentially unfolds in real time.
Nvidia’s stock price fell after CES 2022, but there are questions about whether the decline is related to something specific to the company. Rather, the decline was predicated on broader market weakness against the backdrop of a difficult macroeconomic environment.
Taking this idea a step further, there are likely several catalysts behind the nearly 50% rise in Nvidia’s stock price just a month after CES 2023. In addition to AI emerging as the next big megatrend, 2023 was a year of recovery for the market, especially for technology stocks. The Nasdaq index plunged 33% in 2022, but has since rebounded impressively, rebounding to 43% in 2023.
The Nasdaq’s momentum from 2023 continues this year, with the Nasdaq index up 32% so far in 2024 as of this writing.
While NVIDIA’s announcements at CES 2023 and 2024 likely triggered the increase in buying, the stock price movement actually has little to do with the events themselves. Indeed, hype-based narratives run around high-profile events like CES. However, NVIDIA stock continued to rise, thanks in large part to widespread positive sentiment about the potential of AI.
Nvidia has proven that AI is one of the biggest engines driving the AI movement, and everything the company has in store at CES 2025 will only further prove that. I think so. But for me, the upcoming CES event is akin to an earnings call. What this means is that even if investors get exciting updates, it doesn’t make much sense to buy or not buy a stock before a singular event.
Instead, investors should look at how Nvidia continues to invest in research and development (R&D) and how these new products and services will further separate Nvidia from the competition in the long term. We recommend that you understand. This is a better way to consider whether to buy or hold Nvidia stock.
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Adam Spatacco holds a position at Nvidia. The Motley Fool has a position in and recommends Nvidia. The Motley Fool has a disclosure policy.
Should you buy Nvidia stock before January 7th? Here’s what history suggests. Originally published by The Motley Fool
