Nvidia’s upcoming third-quarter earnings report has sparked concern among investors about the company’s future prospects, particularly with regards to its highly anticipated Blackwell chip line. The launch of this new GPU series is expected to be a significant event, but analysts and investors need to look beyond the surface-level hype.
Key data points suggest that Nvidia’s compute and networking business has been driving growth in recent years, with a focus on data center services and graphics processing units (GPUs). However, the company’s closest partner, Supermicro Computer, has faced controversy recently due to delayed filings and auditor issues. As a result, Nvidia is reportedly shifting some of its supply chain efforts away from Supermicro.
This transition raises questions about the potential impact on Nvidia’s financial guidance related to Blackwell. While early reports estimate $10 billion in revenue by year-end, investors should be cautious about the potential risks associated with this shift. Historically, Nvidia’s earnings reports have been accompanied by increased volatility and momentum in its share price.
However, investors need to consider the long-term implications of competition in the GPU space. New chips from other vendors could pose a challenge to Nvidia’s growth prospects. In light of this, it is prudent for investors to exercise caution and gather more information before making any decisions.
For now, sitting on the sidelines with Nvidia seems like a prudent approach, especially considering the short-term trading nature of Blackwell’s impact on the stock price. Long-term investors should focus on understanding how Blackwell will fare in the face of rising competition and wait for further guidance from Nvidia’s leadership before making any moves.
Source: https://www.fool.com/investing/2024/11/11/should-you-buy-nvidia-stock-before-nov-20-heres-wh