Nvidia’s Blackwell Launch: Should You Invest Now or Wait?
The moment many tech investors have been eagerly anticipating is just around the corner. Nvidia (NASDAQ: NVDA) is set to unveil its potentially revolutionary Blackwell architecture in the coming weeks. This new design features the most powerful chip ever, along with five other innovative technologies, prompting investors to closely monitor the development and launch timeline.
Despite the excitement surrounding Blackwell, Nvidia’s existing architecture, Hopper, continues to generate significant demand. The company’s earnings report reflects this success, showcasing profit and revenue growth exceeding 100% quarter after quarter. Nvidia’s stock has surged 190% this year, yet its valuation remains reasonable given its dominant position in the market and promising long-term outlook.
With this in mind, one question arises: Should you buy Nvidia before or after the Blackwell launch? Let’s explore the options.
Image source: Getty Images.
The Nvidia Journey
To understand Nvidia’s current momentum, we need to revisit its evolution. Initially, Nvidia gained prominence as a provider of graphics processing units (GPUs) for the gaming industry. However, the versatility of these powerful chips quickly revealed their potential beyond gaming.
The company introduced the CUDA parallel computing platform, tapping into various industries, especially with the rise of artificial intelligence (AI). Today, while revenue from video games still grows, Nvidia’s primary growth source comes from its data center division, which includes AI products and services.
As for Blackwell, Nvidia plans to ramp up production in the fourth quarter and aims to generate billions in revenue. The demand for Blackwell has already outstripped supply, and this trend is expected to continue into next year.
At the same time, the Hopper architecture remains in demand. Nvidia reassures customers that its systems work cohesively, and the company frequently develops new algorithms to enhance existing products. This strategy ensures ongoing demand for both current and future offerings.
Nvidia’s robust earnings have propelled its stock up 2,800% over the last five years, with current trading at 50 times forward earnings estimates. This level is not overly expensive, especially considering Nvidia’s leadership in the fast-growing AI sector and its commitment to innovation.
Growth Projections Ahead
So, should you take the plunge and buy Nvidia now, or wait for the Blackwell launch? Nvidia has reported impressive earnings growth recently, but the company anticipates double-digit growth for the upcoming third quarter, with earnings expected to be released on November 20.
However, it’s essential to recognize that comparing quarterly results becomes increasingly challenging as last year’s figures reached extraordinarily high levels. Achieving double-digit growth from such heights would still be impressive. If Nvidia meets or exceeds expectations while providing positive insights into the Blackwell launch, the stock may see an uptick.
Despite the stock’s significant gains this year, even great news may not lead to immediate large-scale performance increases. Investors might see gradual price movements during or after the Blackwell launch, particularly as they await the fourth-quarter sales figures.
This indicates that the decision to buy Nvidia before or after the Blackwell launch may not significantly impact your long-term investment returns. If you plan to hold the stock for the long term, purchasing now or post-launch may yield similar benefits down the line.
Is Investing $1,000 in Nvidia a Good Idea?
Before making an investment in Nvidia, weigh the following considerations:
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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.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
