There’s a growing consensus among experts that artificial intelligence (AI) is on the brink of revolutionizing multiple sectors. Some analysts even argue that we are witnessing the beginning of the fourth industrial revolution. This wave of advanced algorithms and machine learning models promises to significantly boost efficiency by automating tedious tasks and streamlining complex processes.
Among the trailblazers in this transformative landscape is Nvidia (NASDAQ: NVDA), a company that has taken the lead in developing cutting-edge graphics processing units (GPUs). These powerful chips serve as the essential backbone for AI technologies, enabling rapid calculation and the execution of intricate AI models.
Nvidia has experienced substantial growth, driven by several key factors, and an important milestone is approaching. This Thursday marks the anticipated financial report from Taiwan Semiconductor Manufacturing Company (TSMC, NYSE: TSM), the world’s leading semiconductor foundry responsible for producing a substantial share—approximately 90%—of advanced AI chips. In fact, Nvidia is one of TSMC’s largest clients, accounting for an estimated 11% of its sales in 2023, a figure likely to have increased.
Recent insights suggest that TSMC’s forthcoming quarterly report should reflect strong financial performance; they reported NT$759.7 million (around $23.6 billion) in revenue for the quarter ending September 30, achieving year-over-year growth of nearly 39%. This figure exceeds both analysts’ predictions and TSMC’s own forecasts. The anticipated success of TSMC indicates that demand for AI-capable chips remains robust, signaling positive trajectories for Nvidia.
Additionally, Nvidia’s CEO, Jensen Huang, has been vocal in updating the market about the company’s upcoming Blackwell architecture, stating, “Blackwell is in full production, and demand for Blackwell is incredible.” Analysts from Morgan Stanley project that Nvidia could generate an astounding $10 billion from Blackwell chips during its fiscal fourth quarter, which ends in late January.
With the momentum building for AI technologies and TSMC’s promising results on the horizon, investors are faced with an intriguing question: Should they acquire Nvidia stock prior to October 17?
Interestingly, the timing of your investment in Nvidia may be less critical than it appears. The company recently reached a record high, and its market capitalization has soared to $3.4 trillion, reflecting over 200% growth within the past year. If we zoom out further, Nvidia’s stock has surged by an impressive 32,770% over the past decade, underscoring the value of investing in high-quality stocks for the long haul.
Currently, Nvidia trades at a price-to-earnings ratio of 65, which may cause some investors concern. However, projections for earnings per share (EPS) of $4.04 in Nvidia’s fiscal 2026 suggest that the forward price-to-earnings multiple of 34 may not be as daunting as it seems. Experts generally agree that we are still in the early stages of widespread AI adoption. The market potential for generative AI is estimated to grow to between $2.6 trillion and $4.4 trillion annually in the coming years, indicating a wealth of opportunities as new applications and technologies materialize.
In light of Nvidia’s pivotal role in the AI revolution and its stellar growth prospects, whether you decide to invest before or after TSMC’s report may hardly matter in the long run—as long as you seize the opportunity to invest in Nvidia.
Before diving into Nvidia, potential investors should consider all their options. The Motley Fool Stock Advisor team has pinpointed ten stocks they believe are excellent buys for the current market landscape, although Nvidia isn’t among that select group. If, hypothetically, you had invested $1,000 in Nvidia when it was first recommended back in April 2005, your investment could have multiplied to an astonishing $826,069 today.
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As the AI industry continues to evolve and expand, Nvidia stands out as a robust investment opportunity, potentially setting the stage for significant returns.