Nvidia (NASDAQ: NVDA) shares posted a big gain in Wednesday’s trading session, up 12.8% at the close, according to data from S&P Global Market Intelligence.
The chipmaker was boosted by upbeat news in quarterly reports published by Advanced microdevices It is Microsoft Tuesday. Both high-profile technology players beat sales and earnings expectations, and each shared additional details that bode well for Nvidia.
Is it too late to buy Nvidia stock?
In its second quarter report, AMD announced a 115% year-over-year increase in revenue for its data center segment. This is probably a positive sign for Nvidia, despite AMD being a competitor in the market.
Nvidia is by far the leader when it comes to manufacturing high-powered graphics processing units (GPU) for data centers and artificial intelligence (AI) applications, and AMD’s second-quarter results signal that demand in this category remains robust. AMD shares closed Wednesday up 4.4%.
Microsoft shares fell 1.1% after its Azure cloud segment failed to meet some analysts’ expectations, but the software giant had good news for Nvidia investors. Microsoft, which is widely considered Nvidia’s largest customer, said it continued to increase its capital expenditures to strengthen its AI initiatives.
In the wake of Wednesday’s blowout, Nvidia is trading at about 43 times this year’s expected earnings. This is a growth-dependent valuation, but it does not appear exorbitant when viewed in the context of the company’s recent performance, competitive strengths, and untapped growth opportunities.
In the first quarter of fiscal 2025 (which ended April 28), Nvidia’s sales increased 262% year over year to $26 billion, and earnings per share increased 629%. For the fiscal second quarter, management’s guidance was that sales would increase 107% to $28 billion, and its earnings per share are likely to more than double. The company is scheduled to publish its fiscal second-quarter results after the market closes on August 28.
Expectations are undoubtedly high for Nvidia, and shares could remain volatile in the weeks leading up to and following the report. But signs suggest that demand for its hardware has remained strong, and the launch of the company’s next-generation Blackwell chip platform looks set to be a major performance catalyst for it later this year.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Advanced Micro Devices, Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Nvidia emerged today – is it too late to buy shares of the artificial intelligence (AI) leader? was originally published by The Motley Fool
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