Nvidia (NASDAQ: NVDA) stock has roared higher in recent years — and it’s continued with that momentum this year, as it’s heading for a gain of more than 185%. There’s good reason for this top performance. The company has become the leader in a key product to serve a market that may 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 an entire 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 its customers. All of this has led to triple-digit revenue growth for its data center business and high profitability — with gross margin greater than 70% — on those sales.
This strength along with the growth forecast for the entire AI market make Nvidia a great long-term stock to own. If you haven’t yet gotten in on this story, though, you may be wondering about when to make the move. After all, if you buy before an upcoming catalyst, you could benefit from an immediate boost. And that next catalyst might be on Dec. 3. Should you buy Nvidia before then? Let’s find out.
Image source: Getty Images.
Nvidia’s 80% market share
Before looking at what’s coming up on that day next week, let’s first consider the Nvidia story so far. As mentioned, the company’s chips — graphics processing units (GPUs) — now dominate the AI market, holding 80% share. The GPU has the ability to process many tasks at once, and Nvidia has pledged to update its GPUs on an annual basis. This commitment to innovation should help the company maintain its leadership position.
Nvidia’s GPUs are the fastest around, making them the ideal engine for AI projects. And since tech companies are racing to win in the field of AI — aiming to produce the best AI platforms or to use AI to develop game-changing products — they need the very best chip to get the job done. In recent times, Oracle co-founder Larry Ellison said he and Tesla leader Elon Musk even “begged” Nvidia for more GPUs.
Why would Ellison and Musk have to beg? Because so many players have ordered Nvidia’s new Blackwell GPU, demand has surpassed supply. So, even though Nvidia products and services are widely available on every public cloud, it isn’t 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’s happening on Dec. 3? Nvidia will make a presentation at the UBS Global Technology and AI Conference. The event will feature presentations from various companies in the field, with a focus on how technology is transforming the world today — and what’s to come.
The upcoming Blackwell launch
It’s important to remember that Nvidia just reported earnings last week, offering us third-quarter figures along with a fresh update on business in the current quarter. Investors and the company itself are heavily focused on the upcoming release of the Blackwell architecture and chip. The launch is getting rolling, with Nvidia already sending out some products to big customers — it delivered 13,000 chip samples in the third quarter — but the production ramp will happen throughout this current quarter.
Since Nvidia’s earnings report was so recent, I wouldn’t expect any major new announcement at the UBS conference. That said, with the production ramp picking up speed in the coming weeks, at any point the company may offer a new detail that could add to visibility on revenue. So, it’s important to keep an eye on any Nvidia presentation during the quarter.
Now, let’s get back to our question: Should you buy the stock before Dec. 3? If Nvidia gives us new, positive updates or even reiterates that Blackwell demand is soaring, the stock could pop — offering holders a short-term gain.
But, if you plan on holding onto the stock for the long term — the best way to truly win in investing — this won’t impact your returns by much at all. So, though Nvidia is a great AI stock to buy, you don’t have to rush into it before the UBS conference. Whether you buy Nvidia before or after Dec. 3, you could score a major win over the long haul.
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Adria Cimino has positions in Oracle and Tesla. The Motley Fool has positions in and recommends Nvidia, Oracle, and Tesla. The Motley Fool has a disclosure policy.