The Countdown Begins: Nvidia’s Earnings Release Looms Large
On November 20, the market will witness one of the most highly anticipated earnings releases of the season: artificial intelligence (AI) giant Nvidia’s report for its fiscal 2025 third quarter. As a central player in the tech world, Nvidia’s report will have a significant impact on the market, regardless of the outcome.
A Critical Component in AI Infrastructure
Nvidia’s revenue largely stems from the graphics processing units (GPUs) it sells to tech giants like Microsoft, Meta Platforms, and Alphabet. These companies have invested billions in capital expenditures (capex) to build and upgrade data centers, driving the demand for processing power. Nvidia stands to benefit significantly from this trend, as evidenced by the commitments from its big tech customers to continue investing in AI infrastructure.
Capex Spending Soars
Meta, Microsoft, and Alphabet have all pledged to increase their capex levels, which are already at historic highs. This bodes well for Nvidia, as it suggests a continued demand for its GPUs. CEO Mark Zuckerberg emphasized the importance of investing in AI advances, citing strong ROI potential over the next few years.
The Blackwell Architecture: A Game-Changer?
Nvidia’s newest line of chips, Blackwell, is expected to play a crucial role in the company’s future success. Despite some initial fabrication issues, the rollout is on track for this quarter, and there’s already a year-long waiting list for the new GPUs. If Blackwell lives up to expectations, it will solidify Nvidia’s position as the dominant player in AI chipmaking.
A History of Post-Earnings Growth
Historically, Nvidia’s stock has performed well in the weeks following its earnings reports. While past results are no guarantee of future success, the trend suggests that investors may be rewarded for holding onto the stock over the long term.
Investing for the Future
Rather than focusing on short-term fluctuations, investors should consider Nvidia as a strong addition to a diversified portfolio. With its position in AI infrastructure and continued innovation, Nvidia is poised for long-term growth.
Before You Invest…
Consider the expert analysis from The Motley Fool’s Stock Advisor team, which has identified what they believe are the 10 best stocks for investors to buy now. While Nvidia didn’t make the cut, the service provides a comprehensive blueprint for success, including guidance on building a portfolio and regular updates from analysts.
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