Even though it’s only half over, November has already been a busy month. In addition to the U.S. presidential election and a Federal Reserve meeting that came with another reduction to prime lending rate, companies across all industries have been reporting third-quarter earnings over the last few weeks.
But the month’s busyness is far from over. Nov. 20 is another important date, especially for semiconductor stock Nvidia (NASDAQ: NVDA), as it reports third-quarter earnings then. Here’s why I think the stock is set to soar following the report and my reasoning for my recommendation on what to do if you are considering buying it. Is it a buy? Read on to find out.
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As an investor in many technology stocks, I’ve spent a good bit of time over the last several weeks combing through earnings reports for artificial intelligence (AI) companies. The first stocks I analyzed were the “Magnificent Seven” — Microsoft, Alphabet, Apple, Meta Platforms, Amazon, Tesla, and (of course) Nvidia.
The only Magnificent Seven member that has not yet reported earnings this season is Nvidia. That will 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.
The chart below illustrates movements in Nvidia’s share price between November 2022 and November 2024. The line in the graph is annotated to include Nvidia’s earnings reports, which are depicted by the purple circles.
The big-picture idea seen above is that Nvidia stock has gained significantly over the last two years. A share price return of nearly 1,000% in just two years is not the status quo. Clearly, the AI narrative has played a big role in Nvidia’s stock price gains for the last couple of years.
However, the bigger idea that I’d like to emphasize is that there tends to be notable volatility in Nvidia stock leading up to the time of earnings. This upcoming report is no different — between Nov. 1 and Nov. 13, shares of Nvidia have gained 8%. That’s a pretty big move in a two-week time period.
If history is any indicator, I’d say there is more than an even chance that Nvidia stock soars following its earnings report next week. There is a lot on the line for this particular report, and I’d caution investors against getting caught up in momentum-driven narratives.
