Nvidia(NASDAQ: NVDA) Share prices have been soaring higher in recent years – and this year continues that momentum as it heads for a gain of more than 185%. There is a good reason for this top performance. The company has become a market leader in a key product that will serve a market that could be worth $1 trillion by the end of the decade. I’m talking about chips for the artificial intelligence (AI) market.
But Nvidia hasn’t stopped with chips. Instead, the company has built a full portfolio of AI products and services – from networking elements to an enterprise software system. Nvidia has become the “go to” company for AI and counts the world’s top tech companies as customers. All this has led to triple-digit revenue growth for the data center business and high profitability – with a gross margin of more than 70% – on those sales.
Start your morning smarter! Wake up with Breakfast news in your inbox every market day. Register for free »
This strength, along with growth forecasts for the entire AI market, make Nvidia a great long-term stock to own. If you haven’t heard this story yet, you might be wondering when to make the move. After all, if you buy ahead of an upcoming catalyst, you can benefit from an immediate boost. And that next catalyst could be on December 3. Should you buy Nvidia before then? Let’s find out.
Image source: Getty Images.
Before we look at what’s happening on that day next week, let’s take a look at the Nvidia story so far. As mentioned, the company’s chips – graphics processing units (GPUs) – now dominate the AI market, with an 80% share. The GPU has the ability to process many tasks at once and Nvidia has promised to update its GPUs annually. This commitment to innovation should help the company maintain its leading position.
Nvidia’s GPUs are the fastest available, making them the ideal engine for AI projects. And as tech companies race to win in AI – aiming to produce the best AI platforms or use AI to develop breakthrough products – they need the very best chip to get the job done. Lately it has been Oracle co-founder Larry Ellison said he and Tesla leader Elon Musk even “begged” Nvidia for more GPUs.
Why should Ellison and Musk beg? Since so many players have ordered Nvidia’s new Blackwell GPU, demand is exceeding supply. So while Nvidia products and services are widely available in every public cloud, it’s not exactly easy for customers to get their hands on the very latest GPU right away. All of this is reason to be optimistic about Nvidia’s sales as this AI boom continues.
Now you’re probably wondering: what happens on December 3? Nvidia will give a presentation at the UBS Global Technology and AI Conference. The event will feature presentations from several companies in the field, focusing on how technology is transforming the world today – and what’s to come.
It’s important to remember that Nvidia just reported earnings last week and presented us with Q3 numbers, along with a new update on current quarter business. Investors and the company itself are highly focused on the upcoming release of the Blackwell architecture and chip. The launch is getting underway, with Nvidia having already shipped a number of products to major customers – it delivered 13,000 chip samples in the third quarter – but production will continue throughout this current quarter.
Since Nvidia’s earnings report was so recent, I wouldn’t expect any major new announcements at the UBS conference. That said, with production accelerating in the coming weeks, the company may offer a new detail at any time that could add to revenue visibility. So it’s important to keep an eye on every Nvidia presentation throughout the quarter.
Now let’s get back to our question: should you buy the stock before December 3? If Nvidia gives us new, positive updates or even reiterates that demand for Blackwell is soaring, the stock could pop, providing holders with short-term gains.
But if you plan to hold the stock for the long term – the best way to make a real profit from investing – this won’t have a major impact on your returns at all. So while Nvidia is a great AI stock to buy, there’s no need to rush into it before the UBS conference. Whether you buy Nvidia before or after December 3, you could be in for a big win in the long run.
Have you ever felt like you missed the boat on buying the most successful stocks? Then you would like to hear this.
On rare occasions, our expert team of analysts provides a “Double Down” Stocks recommendation for companies they think are about to pop. If you’re worried that you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Nvidia:If you had invested $1,000 when we doubled in 2009,you would have $368,053!*
Apple: If you had invested $1,000 when we doubled in 2008, you would have $43,533!*
Netflix: If you had invested $1,000 when we doubled in 2004, you would have $484,170!*
We’re currently issuing ‘Double Down’ warnings for three incredible companies, and another opportunity like this may not happen anytime soon.
See 3 “Double Down” Stocks »
*Stock Advisor returns November 25, 2024
Adria Cimino has positions in Oracle and Tesla. The Motley Fool has and recommends positions in Nvidia, Oracle, and Tesla. The Motley Fool has a disclosure policy.
Should you buy Nvidia before December 3? was originally published by The Motley Fool
