Nvidia (NASDAQ: NVDA) has climbed a mind-blowing 80% since the start of the year as the company’s earnings continue to reach record levels — and all this is thanks to its dominance in the artificial intelligence (AI) chip market. The tech giant holds more than an 80% share and sells a broad portfolio of products and services to power AI projects.
The secret of Nvidia’s success is simple: The company sells the fastest chip around. Today, this is the H100 graphics processing unit (GPU), but Nvidia is set to launch new products in the months and years ahead as it pours investment into research and development (R&D). The company’s R&D spending rose 18% last year to $8.6 billion.
All this means Nvidia’s share price performance may be far from over — and this week in particular, it may get a boost. Nvidia’s holding its GTC AI Conference from Monday through Thursday, featuring a keynote speech by CEO Jensen Huang and more than 900 sessions involving industry experts. This is the first time the conference is being held in person since prior to the pandemic, so excitement is brewing. Should you rush to buy Nvidia stock this week to get in on the action? Let’s find out.
Huang’s GTC keynote
First, a few notes about what to expect. Investors will listen closely to Huang’s Monday keynote, focused on what’s to come in accelerated computing, generative AI, and robotics. This should offer us a view of the environment for both the company and the industry in the coming year.
Some speculate that this week, Nvidia will introduce the much-anticipated Blackwell, its next-generation GPU architecture, and specifically the B100 AI chip. The B100 to power AI innovation will more than double the performance of Nvidia’s soon-to-be released H200 when it comes to inference, according to Videocardz.com, citing an earlier Nvidia presentation.
The company hasn’t announced a specific release date for Blackwell, but information offered so far suggests it should happen later this year. During the GTC conference, Huang may also update the crowd on other products, or even collaborations with partners.
A risk Nvidia faces is the idea that rivals could eat into its market share, so the company’s ability to continually improve its GPUs and stay ahead is critical. That’s why news about Blackwell and any other clues about the company’s innovations are such important points to watch.
All this could support the idea that Nvidia’s spectacular AI growth is far from over — and may just be getting started. If this is the case, the record levels of earnings we’ve seen so far aren’t set to fall, and new records could be right around the corner. Optimism about this may translate into strong share performance for Nvidia in the coming days.
A long-term buy
So, let’s get back to our question: Should you buy shares of Nvidia this week to potentially benefit from the momentum? Not necessarily. Nvidia represents a top long-term buy, so if you get in on this exciting story today, a week from now, or further down the road, you still could win. If you hold on to Nvidia shares for at least five years, one particular gain or loss over a period of days is unlikely to affect your returns by much.
This means that if you don’t have the time or the cash to invest in Nvidia right this moment, that’s OK. Considering the company’s dominance in the high-growth AI market and its rapid pace of innovation, earnings and the share price could continue to climb over the long haul — and this means you don’t have to buy the stock during one particular week.
That said, if you do have the chance to invest in Nvidia, whether the stock rises, falls, or remains unchanged this week, now is a great time to get in on this AI tech story. The shares trade for 36 times forward earnings estimates, a very reasonable level considering Nvidia’s tremendous growth prospects. Nvidia has already scored an AI win, but there may be many more AI wins to come — and that could be great news for investors who choose to buy and hold the stock for the long term.
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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
Should You Buy Nvidia Stock This Week? was originally published by The Motley Fool
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