Nvidia (NVDA +0.87%) has achieved many milestones in recent quarters: The top artificial intelligence (AI) chip designer was invited into the Dow Jones Industrial Average last year and ended up delivering the best annual performance in the index. This year, Nvidia slipped ahead of Microsoft to become the world's biggest company, and just days ago it took this a step further by becoming the first company to ever reach $4 trillion in market value. That's as the stock hit a new record high.
The company has been on fire for most of the past two years, and right now you may be wondering whether you should hop on board and if so, when. Well, Nvidia, has yet another potential catalyst ahead on Aug. 27. Should you buy the stock before then? Let's find out.
Image source: Getty Images.
Seeing the AI potential early
Let's start off by exploring Nvidia's story so far. The company has actually been around for quite a long time -- more than 30 years -- but it saw growth surge in recent years as part of the AI boom. Nvidia, seeing the potential of AI, decided early on to design its graphics processing units (GPUs) specifically to meet the needs of this growing industry. And this proved to be a game-changing move for the company.
Thanks to this early and strong entrance into AI, Nvidia has seen revenue soar in the double and triple digits, and it's built a rock-solid reputation in the field. Customers needing the most powerful and efficient chips to drive their projects automatically turn to Nvidia, and that's resulted in demand that's even exceeded supply.
This helped Nvidia grow annual revenue from about $27 billion two years ago to more than $130 billion in the most recent fiscal year. Net income has climbed too, reaching record levels as Nvidia ensures high profitability on sales of its chips and related products.
NASDAQ: NVDA
Key Data Points
Nvidia also has made another smart move in recent years, and that's the expansion into a wide variety of AI products and services, making it the go-to seller of anything a customer may need. This includes tools needed for the AI of the future too, meaning Nvidia's revenue power should continue for years to come. For example, Nvidia -- as it powers so many AI functions -- is well positioned to play a key role as agentic AI takes off and if humanoid robots become a growth area down the road.
What's happening on Aug. 27?
So, now, let's consider what's set to happen on Aug. 27, and that's the tech giant's second-quarter earnings report. A couple of months ago, I wrote about Nvidia stock's performance after earnings reports, and it's shown a trend of gains. That may offer investors a reason to be optimistic about post-earnings performance.
It's also important to note that Nvidia received important good news recently. The company, after temporarily losing access to the Chinese market due to U.S. export controls, will be able to sell its GPUs to China soon. The U.S. assured Nvidia that it would receive the license needed to do so. Any details on progress in that area could lift the stock as China is a big market for the company, representing 13% of revenue last year.
Nvidia chief Jensen Huang may offer investors a glimpse into the rollout of Blackwell Ultra, the company's latest chip. CoreWeave, a cloud provider of compute for AI, recently said it's now making Ultra available to customers. Huang is known for delivering earnings calls filled with news and elements that offer visibility on what's to come, so comments from him could impact stock performance.
Of course, Nvidia stock already has climbed in the double digits this year, and potential general economic or import tariff headwinds could represent risks to performance. So, it's never a good idea to buy a stock now and count on gains in the short term. Instead, it's a better idea to consider that player's long-term potential. This greatly increases your chances of scoring a win. You are likely to post a bigger win than if you buy and sell over a period of a couple of months.
All of this means that, though I consider Nvidia a buy right now, you don't have to rush to get in on the stock before the company's earnings report. If you invest ahead of that moment or afterward, the stock could add significantly to the value of your portfolio over the long run.
