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.
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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.
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.
