Though it’s only half over, November has already been a busy month. Along with the U.S. presidential election and a Federal Reserve meeting that got here with one other reduction to prime lending rate, firms across all industries have been reporting third-quarter earnings over the previous couple of weeks.
However the month’s busyness is removed from over. Nov. 20 is one other essential date, especially for semiconductor stock Nvidia(NASDAQ: NVDA), because it reports third-quarter earnings then. Here’s why I believe the stock is ready to soar following the report and my reasoning for my advice on what to do should you are considering buying it. Is it a buy? Read on to seek out out.
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As an investor in lots of technology stocks, I’ve spent a very good little bit of time over the past several weeks combing through earnings reports for artificial intelligence (AI) firms. The primary stocks I analyzed were the “Magnificent Seven” — Microsoft, Alphabet, Apple, Meta Platforms, Amazon, Tesla, and (in fact) Nvidia.
The one Magnificent Seven member that has not yet reported earnings this season is Nvidia. That can change this week. With Nvidia scheduled to report third-quarter results on Nov. 20, all eyes are going to be focused on the AI darling’s progress.
Image source: Getty Images.
The chart below illustrates movements in Nvidia’s share price between November 2022 and November 2024. The road within the graph is annotated to incorporate Nvidia’s earnings reports, that are depicted by the purple circles.
The massive-picture idea seen above is that Nvidia stock has gained significantly over the past two years. A share price return of nearly 1,000% in only two years isn’t the establishment. Clearly, the AI narrative has played a giant role in Nvidia’s stock price gains for the last couple of years.
Nevertheless, the larger concept that I’d wish to emphasize is that there tends to be notable volatility in Nvidia stock leading as much as the time of earnings. This upcoming report is not any different — between Nov. 1 and Nov. 13, shares of Nvidia have gained 8%. That is a reasonably large move in a two-week time period.
If history is any indicator, I’d say there’s greater than a good likelihood that Nvidia stock soars following its earnings report next week. There may be lots on the road for this particular report, and I’d caution investors against getting caught up in momentum-driven narratives.
One among my beliefs about Nvidia’s earnings report next week is that few investors are going to put much weight on the corporate’s third-quarter results. Slightly, I believe the overwhelming majority of investors are going to be honed in on one thing: future guidance.
Particularly, Wall Street analysts are going to be dialed in on the progress of Nvidia’s upcoming launch of the Blackwell GPU architecture. Up to now, your complete narrative surrounding Blackwell has been nothing but positive — with some reporting that the brand new chipsets are already sold out for the subsequent 12 months.
Nevertheless, some recent financial issues over at Super Micro Computer could wind up evolving into an even bigger problem for Nvidia. Following a string of disruptions over at Supermicro, rumors are swirling that Nvidia is routing Blackwell orders away from its key partner in favor of other IT infrastructure specialists. These are only rumors and hopefully more can be learned within the report or the conference call that follows its release.
I don’t have a crystal ball that may tell me how Nvidia stock will move after the corporate reports earnings next week. On the one hand, it’s widely known at this point that demand for Blackwell is thru the roof. Morgan Stanley is even forecasting $10 billion in sales from the brand new product by the top of the 12 months. To place that figure into perspective, Nvidia barely generated $10 billion in revenue for your complete 12 months back in 2020.
If investors learn next week that Blackwell is tracking to plan, then I surmise there can be a positive response that is reflected within the stock price. If by likelihood the Blackwell guidance exceeds expectations, then look out — Nvidia stock could rocket to a recent high.
But with all of this said, I’m wary that a choice to maneuver on from Supermicro could have come too late. While I’m not too frightened about Blackwell’s long-term success, I believe any near-term headwinds Nvidia experiences could give a gap to the competition. If I’m right, Nvidia could possibly be taking a look at an unwanted road bump in its supply chain which could take a toll on near-term growth prospects and end in a sell-off within the stock.
While I ultimately remain optimistic about Nvidia’s report next week, I’d encourage investors to stay on the sidelines — especially considering how much the stock is already moving leading as much as the earnings call.
There may be just an excessive amount of riding on this report, and never enough concrete information regarding Blackwell has been disclosed. I believe buying Nvidia stock prior to next week’s report is a move more aligned with a day trader versus a long-term investor.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Idiot’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Idiot’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Idiot’s board of directors. Adam Spatacco has positions in Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Idiot has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Idiot recommends the next options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure policy.
