It's hard to believe, but 2024 is almost over. Similar to the last two years, perhaps no other company gained as much attention this year as Nvidia (NVDA -2.09%).
This year represented the year Nvidia evolved from a mere chapter in the artificial intelligence (AI) storyline to being the outright author of the narrative. Nvidia's influence in AI is so large that just about any announcement from the company has the power to move the entire capital markets.
While the end of the year is just a few weeks away, I wouldn't tune out just yet. Right at the turn of the New Year (on Jan. 7, to be precise), Nvidia is almost assuredly going to find itself dominating headlines once again.
Let's explore what is happening in early January and assess why this is an important time for Nvidia investors.
What is happening on Jan. 7?
Between Jan. 7 and 10, technology enthusiasts, media journalists, and corporate executives will descend on Las Vegas for one of the biggest conferences of the year -- the Consumer Electronics Show (CES).
CES is similar to Comic-Con but for techies. The tradeshow is an opportunity for business leaders to reveal and discuss new product launches they have in the works and how these services are set to disrupt the next megatrend.
Naturally, AI is the hottest topic in the tech realm right now by a mile. And while I suspect just about every company at CES will be touting its AI roadmap, investors will be honed in on the biggest player in the space -- Nvidia.
Image source: Getty Images.
What does history say will happen?
Below, I've annotated the dates of CES over the last several years and detailed what announcements Nvidia made during these events. Furthermore, I've included some analysis of how Nvidia's stock price moved following prior CES shows.
- CES 2020 (Jan. 7-10): Nvidia showcased its G-SYNC displays on laptops made by Asus, Acer, and LG. Nvidia's stock price rose by approximately 5% one month following the event.
- CES 2021 (Jan. 11-14): Introduced a new line of video cards for desktop computers, dubbed RTX 3060. Nvidia's stock price rose by approximately 12% one month following the event.
- CES 2022 (Jan. 5-7): Released a series of new updates to G-SYNC and GeForce graphics cards and laptops. Nvidia's stock price dropped by approximately 12% one month following the event.
- CES 2023 (Jan. 5-8): Initial talking points around accelerated computing and how Nvidia plans to parlay its progress in graphics processing units (GPUs) for gaming to more sophisticated applications in robotics and autonomous driving. Nvidia's stock price rose by approximately 48% one month following the event.
- CES 2024 (Jan. 9-12): Piggybacking off of CES 2023, Nvidia made further announcements surrounding its next-generation GPU lineups and focused more on generative AI. Nvidia's stock price rose by approximately 36% one month following the event.
As you can see, from 2020 to 2022, Nvidia was still primarily focused on enhancing graphics for higher-end PCs -- namely, those made for gaming and esports. It wasn't until 2023 that Nvidia really started making some progress on the AI frenzy. Make no mistake, this timing is not coincidental.
OpenAI released ChatGPT on Nov. 30, 2022. I personally see the release of ChatGPT as the impetus that sparked the AI fire. Naturally, Nvidia used CES 2023 as a time to show off its plans to get involved in the AI revolution, which was essentially unfolding in real time.
Is Nvidia stock a buy before Jan. 7?
While Nvidia's share price declined following CES 2022, I have my doubts over whether the drop was related to anything specific to the company. Rather, the sell-off was predicated on broader weakness in the market on the backdrop of a challenged macroeconomic environment.
Taking this idea a step further, Nvidia's share price gains of nearly 50% just one month following CES 2023 likely had a couple of catalysts. In addition to AI emerging as the next big megatrend, 2023 was a bounce-back year in the market -- particularly for technology stocks. Following a precipitous decline of 33% for the Nasdaq in 2022, the index rebounded spectacularly and returned 43% in 2023.
The Nasdaq's momentum from 2023 has carried into this year, with the index gaining 32% so far in 2024 as of this writing.
While Nvidia's announcements at CES in 2023 and 2024 likely inspired some increased buying, the stock price movement is actually largely disconnected from the event itself. Sure, there are hype-driven narratives in the days leading up to and following high-profile events, such as CES. But Nvidia's stock price continued gaining mostly thanks to broader positive sentiment around the potential of AI.
Nvidia has proven that it is one of the biggest engines fueling the AI movement, and I suspect that whatever the company has in store at CES 2025 will further demonstrate that. But to me, the upcoming CES event is similar to an earnings report. What I mean by that is even though investors will get some exciting updates, choosing whether or not to buy a stock before a singular event doesn't make a ton of sense.
Instead, I'd encourage investors to watch how Nvidia is continuing to invest in research and development (R&D) and understand how these new products and services will further separate Nvidia from competition in the long run. That's a much better way to consider if you should be buying or holding Nvidia stock.
