<div id="readability-page-1">History doesn't normally repeat itself, but it often rhymes. So investors can take what has happened in the past as an indicator of what might happen in the future. With that in mind, a pattern seems to be developing with Nvidia (NVDA -0.62%) stock: It has made large price gains in May in each of the past two years, and the way the stock is set up right now is reminiscent of how it looked before both of those jumps. That could be a sign for investors to buy it now. <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTc2MDEvcGhvdG8tb2YtZGF0YS1jZW50ZXItd2l0aC1ncHVzLmpwZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="393" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTc2MDEvcGhvdG8tb2YtZGF0YS1jZW50ZXItd2l0aC1ncHVzLmpwZyZ3PTcwMA"/>Image source: Getty Images. </div> <h2>New year, same valuation</h2> Nvidia makes graphics processing units (GPUs), which are fantastic tools for anyone looking to perform the types of computing tasks that can benefit from a lot of parallel processing power -- applications like displaying high-resolution video game graphics (the task they were originally designed for) and artificial intelligence (AI) model training. Demand for GPUs exploded in early 2023 as the race to build out data centers to support AI software kicked off. This led to a big jump in Nvidia's stock price in late May of that year after it reported solid first-quarter fiscal 2024 results and offered impressive guidance for fiscal Q2. <img src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/4750d6acfd87e344fc3f23766dc238cb.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="720" height="456" original-src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/4750d6acfd87e344fc3f23766dc238cb.png"/> NVDA data by YCharts. Fast-forward to May 2024. After Nvidia had already posted incredible results for an entire year, the market wasn't sure whether it could keep its growth rates up. However, it turned in another impressive fiscal Q1 report that sent the stock higher. <img src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/132f97f2c5538f9669e69abbbca10a05.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="720" height="456" original-src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/132f97f2c5538f9669e69abbbca10a05.png"/> NVDA data by YCharts. In May 2025, we're seeing a similar setup. Investors are worried that Nvidia won't be able to deliver the pace of growth they've become accustomed to -- though this time, their concerns are driven by factors such as President Donald Trump's tariffs and fears that a U.S. economic slowdown is imminent. As a result, it's heading toward that quarterly report well off its all-time high and trading at a forward price-to-earnings ratio in the neighborhood of 26. <img src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/7cf15257e1afd73becba5f938e0b9bc1.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="720" height="456" original-src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/7cf15257e1afd73becba5f938e0b9bc1.png"/> NVDA data by YCharts. That's almost exactly the forward PE that Nvidia was trading at during the past two Mays. However, after reporting solid Q1 growth and giving an upbeat outlook for the rest of the year, the stock often starts to trade in the mid-30s to mid-40s range. <img src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/b5f5d7709aaa31257a9b357c44ada1de.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="720" height="441" original-src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/b5f5d7709aaa31257a9b357c44ada1de.png"/> NVDA PE Ratio (Forward) data by YCharts. PE Ratio = price-to-earnings ratio. Because the current setup is nearly identical to the last two years, I'm fairly confident that Nvidia will experience a big share price jump following its fiscal Q1 report on May 28, as long as there are no unexpected announcements or revelations regarding new challenges. <h2>Q1 will feature a $5.5 billion write-off</h2> One headwind for Nvidia that appeared during this year's Q1 was the U.S. government's decision to limit which high-end chips can be exported to China. Because the export rules changed, Nvidia had to take a $5.5 billion writedown this quarter, which will affect its Q1 earnings. Those export restrictions could also drag on future demand. However, the statements by AI hyperscalers in their own recent Q1 reports indicated that they haven't changed their massive capital expenditure plans for data centers, mostly geared toward AI, despite the increasing macroeconomic headwinds generated by Trump's tariffs. The tens of billions of dollars they plan to spend on cloud infrastructure build-outs should give Nvidia the growth necessary to justify its current valuation and then some. Nvidia believes data center capital expenditures will reach $1 trillion annually by 2028, up from around $400 billion in 2024. If that turns out to be true, then there should still be a ton of long-term upside left in Nvidia's stock. But in the near term, Nvidia's stock may be primed for a big move after it reports earnings on May 28. With that in mind, picking up shares at their current fairly cheap valuation looks like it would be a lucrative move. </div>

Nvidia will release its first quarter report for fiscal year 2026 ending April 27, 2025. 

According to analysts surveyed by FactSet, Nvidia's first-quarter revenue is expected to increase 66% year-on-year to $43.3 billion; adjusted earnings per share will increase 44% year-on-year to $0.88. The growth rate of revenue and profits has slowed significantly compared with the same period last year. In the same period last year, Nvidia's revenue increased by 262% year-on-year, and its adjusted earnings per share increased by 461% year-on-year.

Nvidia will release its first quarter report for fiscal year 2026 ending April 27, 2025. According to analysts surveyed by FactSet, Nvidia's first-quarter revenue is expected to increase 66% year-on-year to $43.3 billion; adjusted earnings per share will increase 44% year-on-year to $0.88. The growth rate of revenue and profits has slowed significantly compared with the same period last year. In the same period last year, Nvidia's revenue increased by 262% year-on-year, and its adjusted earnings per share increased by 461% year-on-year.

NVIDIA Financial Results for Q4 Fiscal 2025

NVDA

Nvidia stock has historically shown significant price gains in May, and current market conditions resemble those of previous years. Despite concerns over growth due to tariffs and economic slowdown, Nvidia's strong fiscal Q1 report on May 28 could lead to a price jump. The company faces a $5.5 billion write-off due to export restrictions, but ongoing demand for AI-related data center investments suggests long-term growth potential. Investors may find current valuations attractive ahead of the earnings report.

- Nvidia's stock has historically shown significant price gains in May, suggesting a potential buying opportunity for investors.  
- Despite concerns over growth due to tariffs and economic slowdown, Nvidia's strong fiscal Q1 results and ongoing demand for GPUs, particularly for AI applications, support a positive outlook.  
- The company anticipates substantial growth in data center capital expenditures, which could enhance its stock value in the long term, making current prices attractive for investment.

History Says Now Is the Time to Buy Nvidia Stock