A catalyst for stock performance could be just ahead…
Nvidia (NVDA -3.38%) has delivered a fantastic win to investors over the past few years — whether you got in on the stock five years ago and watched it climb a mind-blowing 1,200% or you bought early this year and have benefited from a double-digit gain so far. As long as you’ve held on to this top artificial intelligence (AI) player, with the idea of accompanying it over the long term, you’ve likely watched your investment grow.
But, if you haven’t yet bought Nvidia shares or aim to add to your position, you may be looking for a good entry point, a time when the stock is reasonably priced and may be set to fly high. And that’s why you might have your eye on Sept. 8, a day when we may hear the latest news from Nvidia. Should you buy the stock before then? Let’s find out.
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The dominant AI chip designer
First, though, a quick summary of why and how Nvidia has been such a market superstar during this AI boom. Early on, as the importance of AI emerged, Nvidia decided to switch gears and focus on developing its graphics processing units (GPUs) for this new technology. Prior to this, the company’s GPUs mainly served the gaming market. The strategy proved itself to be spot on as Nvidia has become the dominant AI chip designer, recording billions of dollars in earnings and double- and triple-digit growth in recent years.
Nvidia’s chips have the first-to-market advantage, but wisely, the company has prioritized innovation in order to keep this advantage going — it’s always a step ahead with AI chip technology. This AI powerhouse launched Blackwell, its latest architecture, late last year and now is rolling out update Blackwell Ultra — next on the release list is the Rubin architecture, planned for next year. All of this should help maintain Nvidia’s position in the AI market, a market forecast to reach beyond $2 trillion a few years down the road.
Considering the fast pace of development in the AI field and the dynamic nature of the Nvidia story so far, it’s not surprising that investors eagerly await any update from Nvidia regarding what may happen next. And this brings me to the subject of Sept. 8. Nvidia is set to present at the Goldman Sachs Communacopia + Technology Conference.
Updates from Nvidia
The annual event, hosted by Goldman Sachs, invites tech and media companies to discuss industry trends, talk about their strategies, and offer business updates. As Nvidia presents, analysts and other attendees will listen closely for any updates on key items that could impact growth in the quarters to come — such as a potential return to selling chips in the Chinese market or any developments in the Rubin release timeline.
The U.S. halted Nvidia’s sales to China earlier this year but in recent days has agreed to grant the company chip export licenses in return for 15% of revenue generated in that country. Details about how this will be put into place haven’t yet been released by the government. As for Rubin, Nvidia recently said the platform is on track for production in volume next year. If Nvidia offers additional details on these points or other key subjects during the Sept. 8 presentation, the stock could react accordingly.
That said, considering the tech giant just reported earnings and spoke with analysts last week, it’s likely Nvidia shared most of its significant news at that time — so it may not reveal much more during the upcoming conference.
Should you buy Nvidia now?
Now, let’s return to our question: Should you buy Nvidia before Sept. 8? Today, Nvidia trades for about 38x forward earnings estimates, more expensive than it was a few months ago but still reasonably priced considering the company’s earnings potential. So, Nvidia makes a great buy right now — but you don’t have to rush into the stock before Sept. 8 and here’s why.
Even if Nvidia’s presentation boosts the stock, if you aim to hold on for the long term — and long-term investing always is the best idea — this short-term price movement won’t change your returns by very much. All of this means, when investing, take your time and don’t rush to get in on a stock before or after one particular date as it won’t matter over the long haul.
With this in mind, it’s a fantastic idea to get in on Nvidia today — or after Sept. 8.
Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group and Nvidia. The Motley Fool has a disclosure policy.