The S&P 500 Has Fallen in 56% of Septembers Since 1928. Here's What That Means for Artificial Intelligence (AI) Stocks.

Some investors dread the end of the summer, mostly because of the so-called "September Effect," which shows that, on average, the market tends to decline during that month.

Indeed, Bank of America research finds that in 56% of the Septembers since 1928, the S&P 500 has fallen, and that over that period, the index has averaged a return of about negative 1.17% in Septembers.

And even AI stocks aren't immune. The September Effect typically spans sectors, and it's coming at a time when some investors are already growing wary of the artificial intelligence trade.

So, what does this mean for holders of leading AI stocks like Nvidia (NASDAQ: NVDA) and Micron Technology (NASDAQ: MU)?

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Why September is historically a bad time for the market

Part of the reason for the September slump may be psychological. After some poor-performing Septembers, investors have come to expect these declines. That leads them to rotate out of stocks, putting downward pressure on prices and thereby perpetuating the month's poor track record.

There are also legitimate reasons for the declines, including investors locking in gains as the year nears its end or starting to sell shares as part of a tax-loss harvesting strategy.

What's more, the Federal Reserve sometimes makes important economic decisions in September that may spur investors to shift their investment strategies. That's the case right now, as inflation rose to 3.3% in July, and the Federal Reserve will meet in September to decide whether or not to raise interest rates.

It's also worth noting that in 44% of Septembers since 1928, the S&P 500 has gone up. That is, of course, nearly half the time.

So while it's true that the S&P 500 declines in September more often than not, the average decline is negligible, and the declines occur just slightly more than half the time.

What this means for Nvidia and Micron

If there's a broad pullback in the market, AI stocks like Nvidia and Micron could lose some ground. Still, both companies are worth adding to your portfolio, and any decline could present a buying opportunity.

Consider that in its recently completed fiscal 2027 second quarter, Nvidia's revenues more than doubled year over year to $96.2 billion, and non-GAAP (adjusted) earnings surged 120% to $2.22 per share. Nvidia's results beat analysts' top- and bottom-line consensus estimates for the quarter.

Nvidia's management also forecast strong revenue growth for fiscal 2028, with CFO Colette Kress predicting that sales will increase 70% during the year, compared with analysts' expectation of just 44% growth.

That doesn't sound like an AI stock that investors should be selling right now, no matter what happens to the broader market in September.

As for Micron, investors are keeping a close eye on the memory company because it reports its fiscal 2026 fourth-quarter results on Sept. 23. Management guided for $50 billion in revenue for the quarter and non-GAAP earnings of $31 per share, both at the midpoint. That would be a 342% increase in revenue and a 923% spike in earnings.

Does that sound like a stock you should sell right now, just because historically, the S&P 500 has averaged a decline of just over 1% in September? No, it does not.

Both of these companies are leaders in the AI infrastructure boom, and investors would be wise to hold onto them. Nvidia still holds an estimated 86% share of the data center GPU market, and Micron is the third-largest global DRAM memory supplier, with 22% of the market.

Large tech companies will spend an estimated $1.3 trillion next year building out AI data centers. That spending will likely continue to fuel Nvidia's processor sales and Micron's memory business.

And if Micron and Nvidia shares do decline in September, that would present a nice buying opportunity for savvy investors.

All of which means that if the September Effect shows up again this year, AI investors should just shrug their shoulders, stay the course, and perhaps take advantage by picking up shares.

Bank of America is an advertising partner of Motley Fool Money. Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology and Nvidia. The Motley Fool has a disclosure policy.