Yes, it is possible. Around half of undescended testes descend on their own during the first 3–6 months of life, especially in full-term babies. That is why your doctor has advised observation for now.
If the testis has not descended by 6 months of age (corrected age in premature babies), it is unlikely to come down naturally after that. In that case, your child should be evaluated by a pediatric surgeon or pediatric urologist, and surgery (orchidopexy) is usually recommended between 6–12 months of age (ideally before 18 months).
Next Steps
Continue regular follow-up with your doctor, and if you notice a swelling in the groin or any pain, seek medical attention promptly.