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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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SpaceX went public on June 12 at a $2.2 trillion valuation, the largest debut in history. While the company hasn’t yet posted a profit, it seems to have convinced Wall Street that it will get there and grow its valuation on the way.

Of the at least 17 analysts that gave a rating on Tuesday, all but one gave it a “buy” or “outperform” rating. MoffettNathanson was "neutral."

The ratings come as SpaceX joined the Nasdaq 100 index, a benchmark tech-heavy basket of companies that underpins millions of portfolios. The inclusion adds built-in demand for the stock from index funds and ETFs.

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Investors had a mixed reaction after the global sports apparel company reported its fourth quarter earnings on Tuesday after the bell. Shares initially rose 5% as Nike beat out Wall Street expectations amid a hefty tariff refund bonus. However, the stock then sank to its lowest level since August 2014 in postmarket trading.

Here are the Q4 numbers:

Revenue of $11.0 billion (estimate: $10.8 billion).
Adjusted earnings per share of $0.20 (estimate: $0.12).

Ahead of this report, Nike warned that results would be flattered by a one-time tariff refund (now estimated at roughly $0.52 per share for the bottom line). That gave the company an extra cushion in snapping its streak of seven quarters of year-over-year profit declines.

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

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