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Does Nvidia’s stock tend to bounce back after a big drop? Charting the evidence from history

How often does the chip giant bounce back? Lessons from history.

1/28/25 8:51AM

Nvidia had just about the Mondayest Monday yesterday. After a year of astonishing momentum, the chipmaker saw some of that reversed with almost $600 billion wiped from its market cap in the biggest one-day monetary loss for a single stock in market history.

While shedding 17% in a single session obviously isn’t great for investors (or CEO Jensen Huang, whose estimated fortune shrank 20% or $20.1 billion in the sell-off yesterday), many analysts — like Dan Ives at Wedbush — are characterizing the stock’s drop as a “golden buying opportunity.”

With the fundamental debate likely to rage for weeks to come — Nvidia, for what it’s worth, thinks DeepSeek only did the easy bit — some investors will be curious: does the stock tend to bounce back after a dreadful day?

We crunched the numbers going back to 1999, when Nvidia first debuted on the stock market, looking for any days when Nvidia fell more than 5%. We found that had happened 370 times (371 if you include yesterday) with Nvidia’s stock trading in the green the day after on 196 occasions, and it falling again on 174 occasions.

So, that translates roughly to the stock “bouncing” (at least modestly) about 53% of the time.

What about a shorter time horizon? After all, the Nvidia of today is a far cry from the Nvidia of the late 1990s. If we examine just the last decade or so, since 2015, we get a slightly different result.

Of the 95 times that Nvidia had fallen more than 5% in the decade before yesterday, the stock was up the next day in 60% of those instances.

In premarket trading, Nvidia was briefly up more than 5%. But the stock has since given up some of those early gains, and is currently trading 3.4% higher than it closed yesterday.

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“Pokemon” trading cards skyrocketing in value and GameStop’s collectibles business taking off are two sides of the same coin

The Wall Street Journal’s fantastic piece “The Hot Investment With a 3,000% Return? Pokémon Cards” includes this vignette:

“...the cards caught fire among amateur investors during the pandemic. As some investors banded together to spark the GameStop meme stock mania, a more fringe group of traders, also stuck at home and armed with cash from government stimulus, began scooping up Pokémon cards.”

And the connection between “Pokemon” cards and the video game retailer is in fact even closer than that:

GameStop’s collectibles business played a big role in why it smashed Q2 revenue expectations! Sales in this segment exceeded $227 million, while the two analysts that provided forecasts had an average estimate of $170.4 million. Fiscal year to date, sales of collectibles make up 25.8% of its revenues, up from 16.4% at this time last year.

The company significantly expanded its footprint in the “Pokemon” trading card world in 2024 by launching in-store buying and selling of individual cards, and introduced “Power Packs,” which include one card graded at 8 or above by the Professional Sports Authenticator, in its most recent quarter.

As a 35-year-old man who still plays “Pokemon” (Nuzlockes are peak math + strategy entertainment!), thinks the release of “Pokemon Go” marked the peak for Western civilization, and considers Christmas 1998 to be the second-best day of his life because it’s when he got “Pokemon Red,” I personally view the outperformance of “Pokemon” cards as being indicative of the power of nostalgia coupled with a drop-off in child rearing by millennials, leaving more room for discretionary purchases and investments.

And the nostalgia business seems like a great place to be.

The Hot Investment With a 3,000% Return? Pokémon Cards

“...the cards caught fire among amateur investors during the pandemic. As some investors banded together to spark the GameStop meme stock mania, a more fringe group of traders, also stuck at home and armed with cash from government stimulus, began scooping up Pokémon cards.”

And the connection between “Pokemon” cards and the video game retailer is in fact even closer than that:

And the nostalgia business seems like a great place to be.

Luke Kawa

Oracle’s hyperscaler competitors lag after the cloud computing giant’s blowout revenue forecast

Oracle’s forecast for mind-blowing revenue growth through its fiscal 2030 is lifting most AI-adjacent stocks today.

However, the ones being left behind in this rising tide, falling or lagging well behind Morgan Stanley’s basket of AI tech beneficiaries (up 5.8% as of 12:22 p.m. ET), are its fellow hyperscalers.

Microsoft and Alphabet, which also have massive cloud divisions, are positive — but only just. Amazon, whose cloud revenue growth was deemed a disappointment relative to peers this quarter, is down 2.8%. Meta is down 1.2%.

This suggests, at the very least, that traders aren’t mapping Oracle’s outlook for Nvidia-like revenue growth onto the other major cloud players or one of their biggest customers.

Nia Warfield

Chewy sinks despite topping Q2 estimates, erasing much of its recent rally

Chewy dropped nearly 16% Wednesday, despite the online pet retailer fetching stronger-than-expected Q2 results and hiking its sales guidance for the year.

The move erased much of a recent blistering run-up for the stock, which had gained 23% off its recent August 5 low through Tuesday.

The company delivered adjusted earnings per share of $0.33 for the quarter, in line with analysts’ consensus forecast of $0.33. Sales jumped nearly 8.6% to $3.1 billion, also above forecasts, with sales to the company’s Autoship customers making up 83% of the total.

Looking ahead: Chewy boosted its full-year sales estimates to $12.5 billion to $12.6 billion, up from $12.3 billion to $12.45 billion. Wall Street was expecting sales of $12.49 billion for the year.

For the current quarter, Chewy guided adjusted EPS to $0.28 to $0.33, compared with the Street’s $0.30 estimate.

Chewy ended the quarter with nearly 21 million active customers, up 4.5% from last year. CEO Sumit Singh said the quarter showed “Chewy’s differentiated value proposition,” citing both customer growth and wallet share gains.

Still, headline net income fell to $62 million, with net margins slipping under cost pressures tied to share-based compensation.

Chewy shares were up 24% year to date going into the print.

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