2 Reasons to Buy Nvidia Before November 20th and 1 Reason to Wait

Nvidia (NASDAQ:NVDA) It has proven to be an excellent investment in the short and long term. The stock is up 2,700% in five years and is on track for an increase of almost 200% so far this year.

The reason behind this is simple: Nvidia has built an artificial intelligence (AI) empire serving one of the fastest-growing fields today. The current $200 billion AI market is expected to reach $1 trillion by the end of the decade. As this growth occurs, Nvidia could be one of the biggest winners.

The tech company’s dominance in products and services related to AI chips has helped it post triple-digit revenue growth and rock-solid gross margins recently. If you’re not into Nvidia yet, you may be wondering whether now would be a good time to invest in this hot stock ahead of its upcoming earnings report. Below are two reasons to buy Nvidia before the November 20 report and one reason to wait.

Image source: Getty Images.

Reason for purchase: Potential update on Blackwell

Nvidia is heading into a big season, and the company will likely give us an update on its fiscal 2025 third-quarter earnings report next week. The technology giant will launch its new Blackwell architecture and its best-performing chip ever in the fourth quarter. In its last earnings report in August, Nvidia said it aims to increase production and generate billions of dollars in revenue during this period.

The tech giant also said that demand for Blackwell has exceeded supply and this is expected to continue next year. This tells us that customers are flocking to Nvidia for the new platform and are even willing to wait for it.

The company had provided updates on the Blackwell launch in past earnings reports this year; So, as we get closer to the key moment, we’ll probably learn more about this major new release. Given its forecast for billions of dollars in revenue by the first quarter of commercialization, there’s reason to be optimistic that Blackwell will be a new growth driver for Nvidia.

The stock could rise after November 20 if this top AI player provides us with confirmation of these points and potentially additional positive details.

Reason to buy: Reasonable valuation in a world of growth stocks

Nvidia isn’t the cheapest stock on the block, trading at more than 50x forward earnings forecasts Today. But it’s important to put this in perspective. For a growth stock involved in AI, this isn’t the most expensive stock, either. software company Palantir Technologies and cyber security giant CrowdStrike for example, both are trading at much higher levels on the same measure.

NVDA Price/Earnings Ratio (Forward) data YCharts.

Nvidia appears to be reasonably priced at today’s level, considering both its track record and its potential for earnings growth in the coming years. As noted, revenue increased and gross profit margin A level above 70% indicates solid profitability on sales. Going forward, growth in the AI ​​market, Nvidia’s leading position, and the company’s focus on innovation to stay ahead will drive earnings growth further.

Nvidia’s potential good news on November 20 could push its stock even higher and increase its valuation. All of this makes Nvidia look like a great stock that could grow over the long term at today’s price.

Reason to wait: Long-term investing means you don’t need to time the market

Nvidia is a great buy today because it’s reasonably priced considering its prospects and could get a boost from any positive news regarding Blackwell in its upcoming earnings report. But, long term investors You don’t need to rush into a particular stock to take advantage of a potential short-term move.

This is because if a stock is held for five years or more, the stock’s performance over a period of a few days or weeks will not have much impact on returns. This is great news because you don’t have to worry about timing the market and be disappointed if you miss a certain earnings period. If the company is solid and has bright long-term prospects, positive share price performance will occur over time.

All this means there are some good reasons to buy Nvidia ahead of its earnings report. But if you’d rather wait or need to wait to get free money to invest, don’t worry. An investment you make after the report or even further in the future can provide a big profit for your portfolio in the long run.

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Adria Cimino It has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike, Nvidia, and Palantir Technologies. The Motley Fool has a feature disclosure policy.