Nvidia(NASDAQ: NVDA) Share prices have been on fire not only in recent months, but also in the past five years: they are up 2,700% in that period. Investors are flocking to the stock as it is a major player in the artificial intelligence (AI) market, one of the hottest growth areas right now. The current $200 billion AI market is expected to reach $1 trillion by the end of the decade, and Nvidia could be one of the biggest winners.
The tech giant has built an AI empire, offering not only the fastest chip to power AI tasks, but also a full portfolio of related products and services. All of this has caused Nvidia’s profits to rise quarter after quarter. And in recent times, Nvidia’s gains have propelled it to milestones such as becoming the most valuable company in the world. Apple early last week – and an invitation to join the Dow Jones Industrial Average.
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Furthermore, Nvidia has two big catalysts ahead: events that could be crucial to the direction of its stock price. Should you get in on this top stock before the action? Let’s find out.
Image source: Getty Images.
First, a quick look at the Nvidia story so far. The company’s graphics processing units (GPUs) are considered the best in the world, and demand for them is high, with the world’s largest technology companies choosing them over the competition. Oracle co-founder Larry Ellison recently said that he and Tesla chief Elon Musk essentially “begged” Nvidia for more GPUs.
As mentioned, Nvidia doesn’t just stick to GPUs. The company provides everything a customer needs to launch and maintain their AI projects – and that customer can access Nvidia through any public cloud, making it easy to find the company’s offerings.
All of this has translated into triple-digit quarterly profit growth, and in the most recent period, Nvidia reported record revenue of $30 billion. And most importantly: that turnover results in a high level of profit, thanks to a gross margin of more than 70%.
Now let’s look at the two upcoming catalysts: Nvidia’s third-quarter earnings report on November 20 and the launch of its new Blackwell architecture in the fourth quarter. News of any kind – positive or negative – can clearly affect stock performance.
Nvidia has already given us a taste of what to expect from both highly anticipated events. The company forecasts double-digit revenue growth and says it will maintain margins around 70%. The revenue growth figure may seem like bad news at first glance, given Nvidia’s string of triple-digit increases. But it’s important to put this in context.
The company’s comparison quarters are becoming increasingly difficult after such huge sales increases over the past few years. AI-related revenues were much lower recently in fiscal year 2023. Quarterly data center revenue at the time was less than $4 billion. In the most recent quarter, the second quarter of fiscal year 2025, data center revenues rose to more than $26 billion. It was much easier to grow into the triple digits from a $4 billion level than from current revenue levels.
All this means that a double-digit increase in sales in the coming quarter would represent a strong performance – not a cause for concern. There is reason to be confident in Nvidia’s ability to meet earnings expectations, as the company talks of continued strong demand for its products and services from quarter to quarter. And the company has built a track record of exceeding expectations, which has been a positive surprise at least over the past four quarters.
The second catalyst to watch is the actual launch of Blackwell. Nvidia has said it wants to ramp up production in the fourth quarter and even expects billions of dollars in Blackwell revenue during that period. If Nvidia meets or exceeds its targets, the stock could explode higher.
However, one risk that may arise is the ability to meet demand and manage the supply chain smoothly. Nvidia has said demand for Blackwell is outpacing supply and the company expects that to continue next year. This is positive as it shows that customers are eager to get their hands on the new platform, but it could work against Nvidia if the tech giant falls behind in serving orders. So it will be something to keep an eye on.
Let’s get back to our question: should you buy Nvidia over these catalysts? Now is a great time to get in on this top AI stock, and if these highly anticipated events unfold as planned, you could benefit. But it’s important to remember that an immediate rise or fall in the stock price won’t have a major impact on your portfolio if you hold the stock for the long term – and long-term investing is the best way to grow wealth.
That means Nvidia is a fantastic AI player to buy today or afterwards the upcoming catalysts as minor short-term news – positive or negative – will not change the company’s bright future prospects.
Consider the following before buying shares in Nvidia:
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Adria Cimino has positions in Oracle and Tesla. The Motley Fool holds positions in and recommends Apple, Nvidia, Oracle and Tesla. The Motley Fool has a disclosure policy.
Should You Buy Nvidia Stock Before These Two Big Catalysts? was originally published by The Motley Fool
