Nvidia Stock Is Gaining Today — Is It Too Late to Invest in the Artificial Intelligence (AI) Leader?

Nvidia (NASDAQ: NVDA) stock is climbing in Tuesday’s trading following news about the company’s Blackwell processors and bullish coverage from analysts. The company’s share price was up 4.6% as of 3:30 p.m. EST.

Reports emerged today that recently highlighted overheating issues with Nvidia’s next-generation Blackwell processors had actually been identified and resolved months ago. In addition to this promising news, the artificial intelligence (AI) leader’s stock received price-target increases from two high-profile financial firms. Nvidia is scheduled to report its third-quarter results after the market closes tomorrow, and its share price is now up roughly 196% across this year’s trading.

Are You Missing The Morning Scoop?  Breakfast News delivers it all in a quick, Foolish, and free daily newsletter. Sign Up For Free »

Is Nvidia stock still a buy?

Nvidia has been this year’s hottest and most influential megacap stock. The company is now launching its next-generation Blackwell graphics processing units (GPUs), and expectations are high heading into the company’s Q3 report tomorrow. Today’s news suggesting that reported overheating issues for the Blackwell processors had actually already been addressed is a promising indicator, and the bullish momentum was strengthened by positive coverage from two high-profile analyst firms.

Citing a strong demand outlook heading into 2025, Truist raised its one-year target on Nvidia stock from $148 per share to $167 per share. Stifel was even more bullish, maintaining a buy rating on the stock and raising its one-year price target from $165 per share to $180 per share.

With its last quarterly update, Nvidia guided for sales of roughly $32.5 billion in Q3 — good for year-over-year growth of roughly 80%. The company also targeted a non-GAAP (adjusted) gross margin of approximately 75%, and performance in the category will be under the microscope as investors look for indications as to whether the company can sustain the strong pricing power that it’s enjoyed amid the AI boom. Investors should approach the stock with the understanding that Wall Street’s expectations are even higher than Nvidia’s own guidance, and it’s possible that the company’s share price could slip even if the AI leader beats the average-analyst sales and earnings estimates.

As a long-term investment, Nvidia stock still holds plenty of promise. The company has a dominant position in the market for advanced GPUs for AI applications, and its industry-leading software platform gives it competitive advantages that complement its hardware performance lead. On the other hand, the stock could be volatile coming out of earnings, and investors may want to adopt a dollar-cost-averaging strategy rather than buying a large amount of stock all at once.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $363,386!*

• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,183!*

• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $456,807!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 18, 2024

Keith Noonan 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.

Nvidia Stock Is Gaining Today — Is It Too Late to Invest in the Artificial Intelligence (AI) Leader? was originally published by The Motley Fool