Investors are looking at Nvidia carefully (NASDAQ: NVDA) The story of this entire artificial intelligence (AI) boom. And there’s a good reason. The company is a leading designer of Graphic Processing Units (GPUs), an important chip used for most important AI tasks such as model training and guessing.
This has led Nvidia to realize double- and triple-digit revenue growth quarters after the quarter, recording levels in recent years and reaching other important milestones. For example, the prestigious Dow Jones Industrial Arraybate invited Nvidia last year. And the stocks will deliver the best performance of all stocks on the 2024 benchmark.
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With all this in mind, it’s logical that investors are enthusiastically listening to every word Nvidia executives say during their company reports and presentations. And now, one of these major moments is just a few days away. In fact, I predict that on February 26th, when Nvidia reported its fourth quarter and fiscal 2025 revenues, it will be the most important day ever for Nvidia stock. And here’s the reason.
Image source: Getty Images.
AI’s Nvidia ecosystem
First, let’s talk a bit about Nvidia’s stories so far. As mentioned above, the company has become an AI chip leader and holds around 80% of the market. However, Nvidia’s AI work does not stop here. The market giant has built an entire ecosystem of AI products and services, from software to networking, creating platforms tailored to the needs of specific industries, such as healthcare and autonomous vehicles. Nvidia recently announced a blueprint that integrates with NVIDIA Enterprise Software to allow customers to create AI “agents.” Therefore, Nvidia is setting it up to benefit from this next wave of AI growth as this technology applies to real issues.
Now, let’s consider the importance of February 26th. Although Nvidia reports revenue quarterly, this particular report could be a significant report for the company as this quarter includes the launch of Nvidia’s most powerful AI architecture. And since innovation is a factor that can keep Nvidia ahead of its rivals, it’s very important to hear how Blackwell’s launch unfolded and how this influenced the revenue picture.
“Amazing” demand for Blackwell
In its previous quarter report, Nvidia said Blackwell demand was “superficial” and follows previous comments on demand beyond supply demand, as the fourth quarter was just beginning. In fact, Nvidia even said it is expected to bring billions of dollars in revenue from Blackwell this first quarter of commercialization.
And comments on profitability were also positive. Blackwell is a complex product that launches due to the fact that it is customizable. This means that costs will increase, but Nvidia expects the total margin to exceed 70%. This is a very high level of profitability for companies that are investing heavily in growth.
So investors are focusing on whether Nvidia’s Blackwell launch has been rolled out as planned. If that’s the case, or if you were surprised in a positive way, this could be a very positive sign for Nvidia, not just in the present but in the long run. It shows that the company can fulfill its promise of innovation and that these innovations have what they need to recharge their growth.
Is February 26th an Nvidia makeup or breaking moment?
Does this mean that February 26th is an Nvidia make-up or breaking moment? That’s not necessarily the case. Investors want to see the near-perfect product launch from Nvidia, but the potential stumbling block is the long-term growth story of this AI leader and the ability to preempt rivals for its focus It is important to note that we will not change the About innovation. So, if the launch weight is a little larger in total margin than expected, then for example, we will not spell out Nvidia’s disaster.
It’s important to every quarter, but what really matters is performance across many quarters. So far, Nvidia has provided excellent long-term performance. This means that investors should not concentrate much in the short term, instead look at the big picture.
However, given the company’s recent comments, I am optimistic about February 26th. And thanks to Blackwell’s development, I think this day is the most important thing ever for Nvidia.
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Adria Cimino has no position in any of the stocks mentioned. Motley Fool has taken a job at Nvidia and recommends. Motley Fools have a disclosure policy.
The views and opinions expressed herein are the views and opinions of the authors and are not necessarily Nasdaq, Inc. It does not reflect the opinions of
