There’s no denying that the growing chorus of experts is suggesting that artificial intelligence (AI) will change virtually everything. Some seasoned analysts and technology enthusiasts have gone so far as to suggest that we are in the throes of the Fourth Industrial Revolution. These advanced algorithms have the potential to dramatically increase productivity by automating time-consuming processes and streamlining many tasks.
There are plenty of companies that have benefited from the accelerated adoption of AI, but probably no more than that Nvidia (NASDAQ: NVDA). The company pioneered graphics processing units (GPUs) that provide the computing power that makes AI possible. Simply put, these computer chips can perform lightning-fast mathematical calculations, allowing complex AI models to be created and run.
There have been a number of catalysts that have sent the chipmaker higher, and this Thursday could mark another. Let’s take a look at what’s in store and whether it could signal (another) big move for Nvidia stock.
The writing is on the wall
Taiwanese semiconductor manufacturing (NYSE: TSM)Commonly referred to as TSMC, it is the world’s largest semiconductor foundry and is responsible for the vast majority of AI chips, producing an estimated 90% of the world’s most advanced processors. Nvidia is among TSMC’s largest customers, accounting for about 11% of the company’s revenue in 2023 – although that number is likely higher now. As such, TSMC’s performance will likely be a canary in the coal mine, providing insight into the trajectory of Nvidia’s results.
TSMC is expected to release its third-quarter financial report on Thursday, and available evidence suggests results will be robust.
The company provides a monthly revenue report, so we already have a fair idea of how things are going. For the three months ended September 30, the company generated revenues of NT$759.7 million (approximately $23.6 million), representing approximately 39% year-over-year growth based on current exchange rates. For context, that’s slightly higher than analyst consensus estimates of $23.09 billion, or about 35% growth. It’s also ahead of TSMC’s own forecast, which called for $22.8 billion at the midpoint.
The fact that TSMC is likely to exceed its own high expectations suggests that demand for AI-processing chips remains robust – which bodes well for Nvidia.
There’s more. Nvidia CEO Jensen Huang has been making the rounds on the financial media, providing updates on the company’s next-generation Blackwell architecture. “Blackwell is in full production, Blackwell is going as planned and demand for Blackwell is crazy,” the CEO said in a recent interview. Morgan Stanley analysts predict Nvidia will generate $10 billion from Blackwell chips during the fourth quarter of 2025, which ends in late January.
Should You Buy Nvidia Stock Before October 17?
The available evidence suggests demand for AI remains robust, and depending on what TSMC executives have to say Thursday, it could potentially act as a catalyst for Nvidia — but should investors buy the stock before October 17?
Honestly, it doesn’t really matter whether you buy Nvidia stock before or after TSMC reports. The stock closed at a new record high on Monday, pushing Nvidia’s market cap to $3.4 trillion, bringing its year-to-date gains to more than 200% (at time of writing). Taking a step back, the stock is up 32,770% over the past decade, illustrating the benefit of buying quality stocks and holding them for the long term.
To be clear: Nvidia has already built in enough growth. The stock currently trades for 65 times earnings, which is enough to send some investors to the exit. However, analyst consensus estimates are for earnings per share of $4.04 for Nvidia’s fiscal 2026, which starts in January. That equates to a forward multiple of 34, which suggests the valuation isn’t as egregious as it might seem at first glance.
Moreover, most experts believe that it is still too early for AI adoption. The market value of generative AI is expected to be between $2.6 trillion and $4.4 trillion per year in the coming years. As new applications emerge and technology evolves, these estimates could well be conservative.
Given the company’s pivotal position in the AI revolution and robust growth prospects, it doesn’t matter whether you buy Nvidia stock before or after October 17, as long as you buy it.
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Danny Vena has positions at Nvidia. The Motley Fool holds positions in and recommends Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
Should You Buy Nvidia Stock Before October 17? was originally published by The Motley Fool
