Nvidia Beat Expectations in the Third Quarter. History Says the Stock Will Do This Next.

Now, let’s see what history says about share performance ahead. Following the past four earnings reports — prior to the one just out last week — the stock has climbed each time in the double digits in the two months to follow. After the first- and second-quarter reports in this fiscal year, Nvidia rose 30% and 11%, respectively. And after the third- and fourth-quarter reports of last fiscal year, the stock climbed 19% and 12%, respectively.

All of this suggests that if Nvidia follows its recent historical trend, the stock could climb over the coming two months.

Does this make the stock a buy? I consider Nvidia a great AI stock to buy now — but not for this reason. It’s important to remember that stocks won’t always follow historical trends, so we can’t be certain Nvidia will indeed rise over the next two months. And buying a stock with the hope of a short-term gain is highly risky and won’t set you off on the right path to wealth.

Instead, it’s better to consider Nvidia’s long-term potential. Does the stock have what it takes to advance in the years to come? And here, the answer is “yes.” Nvidia is the leader in a high-growth market and pledges to innovate to stay ahead — it’s already shown us its ability to do this through launches in recent years, from the Hopper architecture to the recent H200 GPU.

Today’s $200 billion AI market is forecast to reach $1 trillion by the end of the decade, and Nvidia is likely to benefit from this growth.

All of this means that whether history is right and Nvidia advances in the coming weeks or if the stock stagnates or falls, it really doesn’t matter. What’s most important is what happens over the coming years — and over that time frame, there’s reason to be optimistic about this AI giant.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms and Nvidia. The Motley Fool has a disclosure policy.

Nvidia Beat Expectations in the Third Quarter. History Says the Stock Will Do This Next. was originally published by The Motley Fool