Think It’s Too Late to Buy Nvidia Stock? Here’s the Biggest Reason Why There’s Still Time

Nvidia’s post-earnings stumble could be a buying opportunity.

Nvidia (NVDA 1.51%) has become the market’s most visible and influential battleground stock. The artificial intelligence (AI) leader posted second-quarter results after the market closed on Aug. 28 and posted performance that crushed Wall Street’s targets. The business recorded non-GAAP (adjusted) earnings per share of $0.68 on sales of $30 billion in the period, cruising past the average analyst estimate for per-share earnings of $0.64 on revenue of $28.7 billion.

But despite substantial sales and earnings beats in the quarter, Nvidia stock still lost ground following the report. With the company’s share price losing ground on the heels of a blockbuster Q2 report, it’s not unreasonable to wonder whether the red-hot AI leader may have finally hit its valuation peak.

While the stock could continue to see some post-earnings valuation volatility, there’s a good reason to think the stock can bounce back and continue climbing higher.

Nvidia’s gross margins are holding up well and have a positive catalyst on the horizon

Thanks to AI-driven demand for the company’s most advanced processors, Nvidia has been posting fantastic gross margins. The chart below tracks the business’ gross margin over a three-year period concluding at the first quarter of the company’s 2025 fiscal year, which ended April 28, 2024.

NVDA Gross Profit Margin (Quarterly) data by YCharts

With its recent report, Nvidia showed that it had recorded a gross margin of 75.1% in Q2 and also guided for a margin of 74.4% in fiscal Q3. For the full-year period, the company expects its gross margin percentage to be in the mid-70s. Based on the company’s recent results and forecast, it looks like prices for its AI processors are coming down — but not by much.

Nvidia’s current top-of-the-line graphics processing units (GPUs) and accelerators are still showing very strong pricing power, and large tech companies are still buying hardware to improve their AI infrastructure. Selling prices for the company’s current GPUs for advanced data center applications will likely continue to decline, but the AI frontrunner is gearing up to release its next major chip platform.

Nvidia has said that manufacturing of its next-generation Blackwell chips will ramp up in the fourth quarter, and it appears that the new processors are poised for release late in 2024 or early in 2025. With the company’s current processors demonstrating resilient pricing power and a major leap forward in GPU technology on the horizon, the bull case for the stock remains intact.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

Source link

Visited 1 times, 1 visit(s) today

Related Article

ATHEX: MSCI fuels rebound in stock market

The upgrading of the Greek bourse to the category of developed markets by Morgan Stanley starting in May 2027, with the upcoming MSCI index rebalancing, gave a massive boost to Greek stocks on Wednesday, with the benchmark covering a significant part its recent losses in the last couple of days. The postponement of the upgrading

Pacer ETFs Strengthens Global Equity Exposure with the Launch of the Pacer ActiveAlpha India Quality ETF

The firm delivers a new strategy that provides targeted exposure to India’s equity market using a disciplined, factor-based approach MALVERN, Pa., April 01, 2026–(BUSINESS WIRE)–Pacer ETFs (“Pacer”), the leading U.S. issuer in free cash flow ETFs, today announced the launch of the Pacer ActiveAlpha India Quality ETF (Nasdaq: INDQ). The fund, part of Pacer’s Custom

Here’s Why Chevron Stock Dipped Lower Today

Shares in integrated major energy company Chevron (CVX 5.48%) declined by 4.6% to 11:30 a.m. The stock fell as the price of oil dipped by a couple of percentage points to below $100 a barrel. That was enough to encourage selling from investors buying into stocks like Chevron and other highly liquid energy stocks as

The S&P 500 Is Down 4.6% After the First Quarter of 2026. Is a Crash Coming?

The stock market isn’t off to a good start to 2026. Multiple issues are weighing on stocks today, including the war in Iran, elevated oil prices, and question marks still loom about just how strong the economy really is. Plus, the market has been hot for multiple years now — it may be overdue for

From Its Composition to Its Performance: The Lessons of 126 Years of Stock Markets

A significant shift can also be observed in the sectors that have dominated global markets. Of the U.S. listed companies in 1900, nearly 80% of their value was concentrated in sectors that are now small or have disappeared, such as railroads, textiles, iron, coal, and steel. Meanwhile, 70% of today’s U.S. companies come from sectors

The stock market is changing fundamentally — and most investors haven’t noticed

Image source: Getty Images The stock market feels increasingly volatile right now. News is developing fast, sentiment is shifting quickly, and investors are reacting to every new development. But beneath the surface, something more important is happening. This doesn’t look like a market breaking down — it looks like one that’s changing. Right now, the

Down 30%, 3 Red Flags That Suggest Netflix’s Best Days Are Behind It

If investors are coming up with a list of the best stocks of this century, there’s no doubt that Netflix (NFLX +3.32%) would be in that group. It’s certainly one of the most disruptive businesses on the planet. And the performance of its shares, which have risen a jaw-dropping 22,700% in the past two decades,

AI Infrastructure Spending Could Nearly Triple by 2029. Here Are 2 Stocks to Buy.

Big tech is still pouring billions into the data centers powering artificial intelligence (AI) — and the spending wave doesn’t appear to be peaking anytime soon. Statista projects AI infrastructure investment will climb to $902 billion by 2029, up from $334 billion in 2025. Even after strong runs, some of the market’s biggest AI winners,

Stock Market Investing Outlook: 3 Reasons to Keep Buying the Dip

Dip-buying has begun in earnest after a rocky few weeks for stocks that saw the S&P 500 fall as much as 9%. One Wall Street strategist says it’s right on cue. Loading audio narration… Stocks ripped on Tuesday on the prospect of cooling tensions between Iran and the US, with the S&P 500 and Nasdaq

Volatility Is Spiking. Here Are 3 Dividend Stocks You Can Buy Without Hesitation.

Fear is in the air. Sure, the S&P 500 (SNPINDEX: ^GSPC) is holding up pretty well in the face of significant uncertainty. However, implied volatility has risen sharply in recent weeks. Should investors stay away from all stocks with a 10-foot pole? Nope. Here are three dividend stocks you can buy with no hesitation. Will

UK Penny Stocks To Watch With Market Caps Over £100M

The London stock market has recently faced downward pressure, with the FTSE 100 and FTSE 250 indices slipping due to weak trade data from China, highlighting ongoing global economic challenges. Despite these broader market conditions, penny stocks—often representing smaller or newer companies—continue to attract interest for their growth potential at more accessible price points. While

Stock Market Movement | Robot-related stocks surged in the afternoon as Amazon officially entered the humanoid robotics market; institutions are optimistic about the sustainability of the sector’s upward trend.

Robot concept stocks rose in the afternoon. As of press time, Woan Robotics (06600) surged 17.17% to HKD 107.2; Ubtech Robotics (09880) rose 16.51% to HKD 99.5; Hesai-W (02525) climbed 12.17% to HKD 158.5; and LK Technology (00558) increased by 8.85% to HKD 2.83. According to Zhitong Finance APP, robot concept stocks rose in the

Anthropic leaks Claude Code Source Code : $340 billion Anthropic that wiped trillions from stock market worldwide has source code of its most-important tool leaked on internet |

AI firm Anthropic suffered a significant source code leak of its Claude Code agent, exposing unreleased features like an always-on AI and a pet system. This marks the third such incident for the company, which is reportedly preparing for a massive $380 billion IPO. The leak offers a rare glimpse into the company’s development practices.

Three ways the stock market will flip if the U.S.-Iran war ends

Want to know how the market will react when the U.S.-Iran war finally ends? CNBC’s Jim Cramer said Tuesday’s session gives investors the answer.  The “Mad Money” host said that the market “tipped its hand” during Tuesday trading as stocks finally rallied and rates went lower, describing the day as “a dry run of what

Women Lag in Stock Market Investing Despite Gains in Education and Employment

Got story updates? Submit your updates here. › The complex, mechanical infrastructure of the financial system remains a barrier to greater participation by women, who face societal biases and pay disparities that limit their access to investing.NYC Today While women have made significant strides in education and employment, a data analysis shows they still lag

Why Biogen Stock Sank While the Market Soared on Thursday

Bullishness was in the air on the stock market on Tuesday, but you’d hardly know that from the performance of Biogen (NASDAQ: BIIB). The healthcare sector mainstay saw its share price slump by over 2% that trading session, in contrast to the gravity-defying S&P 500 index’s nearly 3% increase. Investors were clearly unimpressed with the

Why AlTi Global Stock Lagged the Market Today

AlTi Global (ALTI +0.83%) stock inched up on Tuesday, but given how frothy the market was that day, it could have done better. Investors traded the wealth and asset management company’s shares up by 0.6%, which was easily topped by the benchmark S&P 500 index’s robust 2.9% gain. The main reasons for this were the

0
Would love your thoughts, please comment.x
()
x