2 Reasons to Buy Nvidia Before Nov. 20 and 1 Reason to Wait
Tuesday, Nov 12, 2024 4:08 am ET
1min read Nvidia (NVDA) has been a standout performer in the AI sector, with its graphics processing units (GPUs) powering most AI applications. As the company approaches its fiscal 2025 third-quarter earnings report on Nov. 20, investors are wondering whether to buy Nvidia stock before the report. This article explores two reasons to buy Nvidia before Nov. 20 and one reason to wait.
Reason to buy: Potential update on Blackwell
Nvidia is set to launch its new Blackwell architecture and best-performing chip ever during the fourth quarter. With demand surpassing supply, customers are eager for the new platform, indicating potential billions in revenue during commercialization. An update on Blackwell during the Nov. 20 earnings report could boost the stock.
Reason to buy: Reasonable valuation in the world of growth stocks
Nvidia isn't the cheapest stock on the block, trading at more than 50x forward earnings estimates today. However, it's important to put this into perspective. For a growth stock involved in AI, it's not the most expensive stock, either. Software company Palantir Technologies and cybersecurity giant CrowdStrike both trade at much higher levels by the same measure. Nvidia actually looks reasonably priced at today's level when considering both its track record and potential for earnings growth in the years to come.
Reason to wait: Long-term investing means you don't have to time the market
Nvidia makes a great buy today because it's reasonably priced, considering its prospects, and may get a boost from any positive news on Blackwell during the upcoming earnings report. However, long-term investors don't have to rush into a particular stock to benefit from a potential short-term move. This is because share performance over a period of a few days or weeks won't have much impact on returns if a stock is held for five years or longer.
In conclusion, Nvidia offers two compelling reasons to buy before the Nov. 20 earnings report: the potential update on Blackwell and its reasonable valuation. However, investors with a long-term perspective may choose to wait, as the short-term market timing may not significantly impact their overall returns. Regardless, Nvidia's dominance in AI chips and services makes it a strong contender for long-term growth and income-focused portfolios.
Reason to buy: Potential update on Blackwell
Nvidia is set to launch its new Blackwell architecture and best-performing chip ever during the fourth quarter. With demand surpassing supply, customers are eager for the new platform, indicating potential billions in revenue during commercialization. An update on Blackwell during the Nov. 20 earnings report could boost the stock.
Reason to buy: Reasonable valuation in the world of growth stocks
Nvidia isn't the cheapest stock on the block, trading at more than 50x forward earnings estimates today. However, it's important to put this into perspective. For a growth stock involved in AI, it's not the most expensive stock, either. Software company Palantir Technologies and cybersecurity giant CrowdStrike both trade at much higher levels by the same measure. Nvidia actually looks reasonably priced at today's level when considering both its track record and potential for earnings growth in the years to come.
Reason to wait: Long-term investing means you don't have to time the market
Nvidia makes a great buy today because it's reasonably priced, considering its prospects, and may get a boost from any positive news on Blackwell during the upcoming earnings report. However, long-term investors don't have to rush into a particular stock to benefit from a potential short-term move. This is because share performance over a period of a few days or weeks won't have much impact on returns if a stock is held for five years or longer.
In conclusion, Nvidia offers two compelling reasons to buy before the Nov. 20 earnings report: the potential update on Blackwell and its reasonable valuation. However, investors with a long-term perspective may choose to wait, as the short-term market timing may not significantly impact their overall returns. Regardless, Nvidia's dominance in AI chips and services makes it a strong contender for long-term growth and income-focused portfolios.
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