Is It a Good Time to Invest in Nvidia Before Wednesday?

Nvidia (NASDAQ: NVDA) has benefited greatly from AI developments. AI has grown rapidly thanks to Nvidia's GPUs since early last year. Wall Street will be anxious to analyze the company's first-quarter profits after the market close on Wednesday, as it faces a major challenge.  

Due to rising AI demand, the stock has risen 548% since January. Nvidia has led the AI revolution, but investors are wondering if it can continue at its current pace. Should investors buy Nvidia stock before its highly anticipated first-quarter report? Examine the evidence.  

In recent months, investors have lost interest in the AI revolution. The big cloud services have been vocal about the demand for generative AI and their plans to invest more. Microsoft's calendar first-quarter capital expenditures rose 79% to $14 billion, while Alphabet's rose 90% to $12 billion. Amazon anticipates capex spending to "meaningfully increase" thanks to AI, spending $14 billion in the first quarter, its lowest of the year.  

Data centers and cloud infrastructure providers are Nvidia's biggest customers, so the report should be good. Analysts estimate Nvidia's fiscal 2025 first quarter revenue to rise 277% to $24.6 billion and EPS to rise from $0.83 to $4.57. Nvidia reported record fourth-quarter revenue of $22.1 billion, up 265%, and its projection is $24 billion for Q1 revenue, which is cautious.  

The end is near? Recent weeks have seen several AI-focused companies publish results, and the market's reaction has been confusing. Palantir Technologies (NYSE: PLTR) reported first-quarter revenue of $634 million, up 21% year over year and 4% sequentially, and adjusted EPS of 60%. Wall Street didn't like its guidance, and the stock plunged 15% after the report.  

Chip designer Arm Holdings (NASDAQ: ARM) reported 47% revenue growth to $928 million and 1,700% adjusted EPS growth to $0.36 in its fiscal 2024 fourth quarter (ending March 31). Despite rising sales and profitability, investors wanted stronger guidance, and the stock dipped 2% after the announcement.

AI-focused server company Super Micro Computer (NASDAQ: SMCI) reported record revenue of $3.85 billion and adjusted EPS of $6.65 in its fiscal 2024 third quarter (ending March 31). Wall Street wanted more despite upping forecast, and the stock fell 14% after its report.  

An emerging pattern will have caught investors' attention. Wall Street is waiting for the future despite great, expectation-beating performance. These results indicate that while demand for AI remains high, investors are demanding exceptional performance and robust guidance to prove that AI's secular tailwinds continue.