The moment many tech investors have been waiting for is just around the corner. Nvidia (NASDAQ: NVDA) plans on launching its potentially game-changing Blackwell architecture in the weeks to come. Blackwell includes the most powerful chip ever along with five other major innovations, and investors have been closely watching the development and launch timeline.
Meanwhile, even as it plans this big launch, demand for Nvidia's current architecture, Hopper, has continued to soar. And the tech giant has delivered excellent earnings results with profit and revenue climbing in the triple digits quarter after quarter. The stock has soared 190% so far this year, but valuation actually remains reasonable considering the company's leadership in the market and long-term prospects.
So, Nvidia looks like a buy -- but should you make the move before or after the Blackwell launch? Let's find out.
Image source: Getty Images.
The Nvidia story
First, let's summarize the initial chapters of this exciting story that has unfolded over the past several years. Nvidia built a solid position as a seller of graphics processing units (GPUs) to the gaming market -- but it soon became clear that these powerful chips with the ability to process multiple tasks simultaneously could be useful in many other industries too.
The company developed the CUDA parallel computing platform to make this happen, and as the artificial intelligence (AI) boom accelerated, Nvidia began generating more and more sales from AI customers. Today, though video game revenue still is growing, Nvidia generates the lion's share of growth and revenue from its data center business -- the unit that includes its AI products and services.
Now, let's consider the introduction of Blackwell. Nvidia says it aims to ramp up Blackwell production in the fourth quarter and even generate several billions of dollars of Blackwell revenue during the period. Demand has surpassed supply, and the company sees this as continuing well into next year.
At the same time, as mentioned, customers continue to order Hopper too -- Nvidia says all of its systems work together, and the company develops new algorithms on a regular basis to improve its already existing products. This means if you already are working with Nvidia, you don't have to worry about your current system becoming obsolete just because new products and services are launching. All of this keeps demand growing for current and future products.
Nvidia's earnings strength has helped the stock to climb 2,800% over the past five years, and today the stock trades for 50 times forward earnings estimates -- this isn't ridiculously expensive considering Nvidia's leadership in the high-growth field of AI and its focus on innovation.
A double-digit growth forecast
Now, let's get back to our question. Should you buy Nvidia today or after the Blackwell launch? As mentioned earlier, Nvidia's earnings have climbed in the triple digits in recent times, but the company is forecasting double-digit growth for the third quarter. That report is set for Nov. 20.
Before looking at this as a slowdown, it's important to note that quarterly comparisons are getting tougher and tougher for Nvidia -- because quarterly revenue as of last year reached extremely high levels. So double-digit growth from those levels would be fantastic. And if Nvidia meets or beats expectations and offers more positive commentary about the Blackwell launch, the stock could climb.
That said, considering the stock's gains this year and in recent years, even fantastic news may not result in explosive share performance overnight. We might see waves of increases here and there during the Blackwell launch or even a bit later -- investors may wait to hear about the sales levels in the fourth quarter report.
All of this means it won't matter much if you buy Nvidia before or after the Blackwell launch, and this is especially true if you hold onto the stock for the long term. Near-term movement won't make much of a mark on your five or 10-year returns. So you can go ahead and buy Nvidia now or wait until after the Blackwell launch, and thanks to the company's great prospects, in either case you may score a win over the long haul.
Should you invest $1,000 in Nvidia right now?
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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 the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
