Nvidia’s stock is on the rise for two main reasons. First, the latest earnings report for the company showed a significant increase in revenue, particularly in the data center segment. Sales for the first quarter of fiscal 2025 exceeded expectations, reaching $26 billion, and Nvidia is projecting further growth to around $28 billion in the next quarter. This strong performance has contributed to a more than 90% increase in Nvidia shares this year and a tripling of the stock value over the past 12 months.
The second reason to consider investing in Nvidia is the anticipation surrounding the release of its new artificial intelligence (AI) chips with the Blackwell generative AI architecture. While some investors were concerned that customers might wait for these new chips before making purchases, the high demand for Nvidia’s products suggests that waiting customers will create an opportunity for new orders from smaller clients. Additionally, larger customers like Metaplatforms and Tesla are expected to continue buying Nvidia products, including the Blackwell chips once they become available.
Another growth opportunity for Nvidia is its automotive segment, which saw a 17% increase in revenue from the previous quarter and an 11% increase from the previous year. Although this segment is currently smaller than the data center business, Nvidia’s Drive platform is gaining traction with robotics companies and Chinese electric vehicle manufacturers. As the demand for autonomous driving technology grows in the coming years, Nvidia stands to benefit from another sales boom similar to what it has experienced in the data center market.
Overall, investors looking for long-term growth potential should consider investing in Nvidia, as the company’s strong performance in key sectors like data center and automotive, combined with the anticipation surrounding new product releases, position it for continued success. The market outlook for Nvidia remains positive, making it a compelling opportunity for investors seeking growth in the tech industry.
Article Source
https://www.fool.com/investing/2024/05/23/is-nvidia-stock-still-a-buy-after-it-just-popped-a/
