History Says Nvidia Stock Does This in November. Here's the 1 Thing That Could Break the Pattern.

Nvidia's (NASDAQ: NVDA) rapid ascent to the world's most valuable enterprise might be unlike anything the market has ever seen. In the past five years, its share price has produced an incredible 899% gain (as of Oct. 15). With that return, a $10,000 investment would be worth $100,000 today.

The driver of this has been, unsurprisingly, artificial intelligence (AI). Nvidia's graphics processing units are the leading chips for training and running AI models. And these hardware devices are a hot commodity among the company's customers. Nvidia's data center revenue soared 117% year over year to $89 billion last fiscal quarter (Q2 2027 ended July 26).

A burgeoning industry position in the middle of a generational technology shift is an easy sell to investors right now. History says this AI stock tends to perform well in November, so maybe now is a good time to buy shares. But there's one thing that could break that pattern of positive returns.

Image source: The Motley Fool.

November 2025 was the only negative return

This decade, Nvidia has been a compelling portfolio addition in November. In November 2020, shares were up 7%. In November 2021 and 2022, they jumped more than 25%. November 2023 saw a 15% increase, followed by a more muted 4% gain in November 2024.

The bears finally cheered last year. During the 11th month of 2025, Nvidia stock dipped 13%.

Nvidia optimists will take the average return of 13% and conclude that the share price will rise by that much this November. On the other hand, the naysayers will point to the clear deterioration in the stock's monthly performance in recent years. They'll assume shares are set to fall in November.

Investors shouldn't jump to any conclusions, however. The macroeconomic backdrop, as well as industry conditions, seem to have been anything but stable. Then there's market sentiment, which is constantly shifting based on how the investment community is feeling at any particular moment. November could bring anything.

Hyperscalers are Nvidia's key demand driver

Let's still assume that there's a higher probability that Nvidia posts a positive return compared to a loss in November. Instead of taking a victory lap, consider what could break that pattern of upbeat results. In my view, it comes down to one thing.

Nvidia's most important customer cohort contains the five big hyperscalers. Combined, Alphabet, Microsoft, Amazon, Meta Platforms, and Oracle, as well as other hyperscalers, contributed $49 billion to data center segment sales, which as mentioned, totaled $89 billion in the most recent fiscal quarter. These customers are spending tremendous sums of capital to build AI-related technical infrastructure.

The amount of money they allocate to Nvidia products and services depends on how much momentum their businesses have. Specifically, we've seen cloud revenue accelerate for Amazon Web Services, Microsoft Azure, Google Cloud, and Oracle Cloud Infrastructure in recent quarters. Hyperscaler backlogs have exploded, measured cumulatively at more than $2 trillion.

That's an immediate demand signal that helps to alleviate investor concerns about Nvidia's own business strength. Four of the top five hyperscalers will report their third-quarter financial results in the next two weeks. Investors should continue to pay close attention to numbers and commentary related to how their cloud segments perform.

The logic is straightforward. Slower cloud growth gives hyperscalers less reason to keep expanding capital expenditures (capex) at the current pace. And any cuts to forecast capex will negatively impact Nvidia's data center business. Furthermore, market sentiment might plummet.

If the growth decelerates in Q3, it's not exactly a reason to panic. That doesn't automatically start a trend. And the view is that AI is still in the early innings. However, a slowdown could drive fears that the AI boom is starting to cool. That could pressure Nvidia shares.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Oracle. The Motley Fool has a disclosure policy.