Nvidia's stock expected to rebound with strong revenue growth and continued AI investments

From Nasdaq: 2024-08-22 06:50:00

Nvidia (NASDAQ: NVDA) is the tech stock to watch with highly anticipated upcoming earnings. Revenue soared due to extreme demand for Superchips, leading to pricing power. EPS growth exceeded 400% for four consecutive quarters, propelling stock prices up. Despite recent dip, fears of recession, slowing growth, and AI skepticism, Nvidia is expected to continue its upward trend.

Tech giants like Amazon and Microsoft continue to invest in AI, fueling Nvidia’s revenue growth. Alphabet plans to increase capital expenditures to $50 billion. Nvidia must defend market share amid ongoing spending sprees by big tech companies. The cash flow into Nvidia remains strong as these companies prioritize AI investments.

Positive signs show AI delivering returns, with Meta’s earnings call showcasing significant revenue and EPS growth attributed to AI improvements. An IDC study revealed a $3.5 return for every $1 invested in AI by businesses. While AI’s long-term impact remains uncertain, current results suggest it may fulfill its promise.

Considerations before investing in Nvidia: It didn’t make the list of the 10 best stocks to buy now by The Motley Fool’s Stock Advisor analyst team. Since 2005, stocks recommended by Stock Advisor have outperformed the S&P 500 with significant returns. While Nvidia has potential, other stocks may offer greater returns. Research and consider investment options carefully.



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