Despite reporting one of the most spectacular earnings quarters in its history, NVIDIA Corp. (NASDAQ:NVDA) is on track to end November with its worst monthly performance in over three years, raising fresh questions about whether the chipmaker’s AI-fueled rally has hit a wall.
• NVDA is encountering selling pressure. Get the inside scoop here.
Through Nov. 25, Nvidia shares are down 14% month-to-date, a negative monthly return unseen since September 2022.
This pullback sharply contrasts with the company's historical trend: November has traditionally been one of Nvidia's strongest months, averaging a 10.55% return with a 77% win rate.
Notably, the stock recorded only four double-digit November declines since 1999.
Nvidia has returned over 1,300% in the past three years, emerging as the undisputed face of the generative AI revolution.
The latest pullback has sparked debate among investors: Is this just a correction, or the beginning of a broader unwind in the AI trade?
What's Driving The Drop Despite Blockbuster Earnings?
Earlier this month, Nvidia delivered record-breaking third-quarter results. Revenue soared to $57 billion, comfortably beating Wall Street expectations.
The company also raised its outlook, reinforcing its dominant position in the AI chip market.
But the market didn't celebrate. Instead, Nvidia shares began to slide — initially due to growing concerns that AI stocks may have rallied too far, too fast.
Adding to the pressure, new competitive threats emerged.
Reports this week revealed that Alphabet Inc. (NASDAQ:GOOGL)(NASDAQ:GOOG) is negotiating to lease its custom tensor processing units (TPUs) to Meta Platforms Inc. (NASDAQ:META) and other hyperscalers, in an effort to capture as much as 10% of Nvidia's current AI chip revenue by luring large customers away from its dominant GPU ecosystem.
Can December Change the Mood?
Historically, December has been a slightly positive month for Nvidia, with an average return of 3.2% and a 62% win rate since 1999.
But a closer look at recent years reveals a more troubling pattern.
Over the past decade, December has been Nvidia's worst-performing month on average, with a 1.69% loss and only four green months in the last 10 years.
More strikingly, Nvidia has finished December in the red in four of the past five years.
Looking back at previous instances of sharp November declines also offers little clarity. In 2000, after a 34.8% drop in November, Nvidia fell another 19.1% in December.
In 2007 and 2008, the stock rebounded 7.86% and 8%, respectively, after double-digit November losses.
But in 2018, another 18.3% decline followed the November slump.
| Year | November (%) | December (%) |
|---|---|---|
| 1999 | 56.50 | 35.56 |
| 2000 | -34.83 | -19.10 |
| 2001 | 27.48 | 22.44 |
| 2002 | 43.95 | -32.81 |
| 2003 | 20.08 | 9.28 |
| 2004 | 32.20 | 23.16 |
| 2005 | 7.75 | 1.13 |
| 2006 | 6.08 | 0.05 |
| 2007 | -10.85 | 7.86 |
| 2008 | -14.73 | 8.03 |
| 2009 | 9.20 | 43.03 |
| 2010 | 13.21 | 13.16 |
| 2011 | 5.61 | -11.32 |
| 2012 | -0.04 | 2.42 |
| 2013 | 2.71 | 2.69 |
| 2014 | 7.32 | -4.39 |
| 2015 | 11.81 | 3.91 |
| 2016 | 29.57 | 15.77 |
| 2017 | -2.95 | -3.59 |
| 2018 | -22.48 | -18.31 |
| 2019 | 7.82 | 8.56 |
| 2020 | 6.92 | -2.59 |
| 2021 | 27.81 | -9.99 |
| 2022 | 25.38 | -13.64 |
| 2023 | 14.69 | 5.88 |
| 2024 | 4.14 | -2.86 |
| Average | 10.55% | 3.24% |
| % Positive | 77% | 62% |
The Bottom Line
Nvidia's weak November performance, despite strong earnings, highlights how investor sentiment is shifting as valuations and competitive risks come into sharper focus.
While December has historically offered mixed results, the coming weeks may provide a clearer view on whether the recent pullback is a pause in a longer trend or a sign of cooling momentum in the AI trade.
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Photo: JRdes via Shutterstock
