Should You Buy Nvidia Stock Before the Massive Investor Update? | NVDA Stock Analysis

Added: 2026-05-15

[00:00:00]Nvidia is scheduled to report quarterly financial results after markets close on May 20th, 2026, and investors want to know if this stock is a buying opportunity ahead of those earnings results. I'll answer that question in this video, as well as preview what investors should look out for from Nvidia in the upcoming results.

[00:00:19]>> I want to thank The Motley Fool for sponsoring this video. Visit fool.com/parkev for the 10 best stocks to buy now.

[00:00:27]>> Of course, when Nvidia last reported quarterly results on February 25th, 2026, they reported record revenues of 68 billion, which was up 73% year-over-year.

[00:00:39]Furthermore, Nvidia is ready to launch its next-generation Vera Rubin technology, and the management team expects this will extend their leadership position even further.

[00:00:51]Enterprise adoption of agents are skyrocketing, and their customers are racing to invest in AI compute, the factories that power this revolution and future growth. Of course, in recent months and recent weeks, we've seen the AI trade broadening out beyond the GPU, which Nvidia is most famous in providing. Companies like AMD, Intel, and Micron have soared in recent weeks because the artificial intelligence data center is now incorporating more of that technology, the CPU and the memory components are becoming increasingly important to support the GPU, as well.

[00:01:33]The GPU was the headliner, the main event, and everything up until about 6 months ago, where the memory component started increasing in importance, and then now in recent weeks, we've had the CPU gaining in importance, and so we've seen this trade broadening out. Nvidia stock is up, right? But, Nvidia stock is trailing AMD and Intel and Micron and others in this industry, SanDisk, that are benefiting as investors are waking up to realize that, you know, it's not only the GPU that's going into these data centers. As I mentioned, 73% revenue growth reported from Nvidia in its most recently completed quarter with operating income jumping by 84% to 44 billion. Nvidia is one of the most profitable companies in the world right now. It's always been a lucrative business, but in recent years, since the launch of Chat GPT, that profitability has exploded further still. On an operating margin basis, Nvidia is generating operating margins above 60% and cash flow from operations to sales approaching 50%. These are extremely attractive numbers, and the companies I mentioned earlier, SanDisk, Micron, Intel, AMD, they're nowhere near these figures. Nvidia is still outperforming these companies dramatically. Looking ahead in the upcoming quarter, Nvidia is forecasting revenue of $78 billion with gross profit margins around 75%.

[00:03:03]Now, if they hit that figure of $75 billion, that would be about 10% incremental growth from the current quarter where they reported $68 billion in revenue.

[00:03:15]However, if I had to guess, if you forced me to wager, I would think that Nvidia will deliver quarterly revenue results above what they're guiding for the upcoming period. That's because the figures I've seen from the companies that Nvidia is selling its products to have all expanded and increased their budgets for how much money they will spend in the current year. And that's been great news for the entire ecosystem, the entire industry, and I think it's been healthy for the stock market, for the AI trade to broaden out to encompass more companies, instead of just focusing on Nvidia and the other few companies that were initially benefiting from the AI boom. Looking ahead longer term, the analyst on Wall Street that are following Nvidia expect the company will deliver 72% revenue growth in its current fiscal year, which will end in January of 2027.

[00:04:12]Those analysts expect a significant drop-off in the next fiscal year, which will end in January of 2028, where they're forecasting revenue will increase by 31%.

[00:04:23]Overall, that would still be a $115 billion in revenue growth, but the rate of increase will slow down dramatically.

[00:04:31]And that's true for the fiscal years that are follow after that. And intuitively, that makes sense when you're thinking about the data center market, which Nvidia is benefiting from right now. It's benefiting from the replacement cycle, replacing older generation data centers that were primarily based on old technology, older generation CPUs. And now, these data centers are being built primarily focused on GPUs, and these data center build-outs will uh expand in the current year and probably in the next year, but then will reach a level where these companies, and there's relatively few of them, like Alphabet, Microsoft, Amazon, and Meta Platforms, they'll reach a level where they feel comfortable with how much computing power they have, and then demand for Nvidia's products will primarily be based on replacing the technology that they put into place in 2023 and 2024. So, as we start to approach 2029 and 2030, that's when you'll start to see the replacement cycle for Nvidia. That's if the conditions remain where we are today.

[00:05:38]There are still several catalysts, including in automotive and healthcare, that Nvidia hasn't benefited significantly just yet. If we start to see driverless car technology become available more broadly, and Nvidia's computing is critical in supporting that industry. Furthermore, we haven't seen very many advancements in health care incorporating artificial intelligence for drug discovery. If we start to see breakthroughs in that category, that could be another catalyst that would drive growth for Nvidia's products even beyond the levels where it's at today.

[00:06:14]Large language models and the current use cases for artificial intelligence are relatively low value if you think about what it's being used for right now to automate relatively simple tasks or to offer customer service support.

[00:06:29]Simple things like that may be to look over all of your invoices for the current year and aggregate the totals.

[00:06:37]Maybe look at your receipts for the current year and aggregate the totals.

[00:06:42]So, these are relatively low value tasks that artificial intelligence is helping automate. But, if we expand into categories like driverless car technology, think of all of the money that's being spent for transportation, delivery, and truckers, etc. professional drivers. Imagine replacing that or reducing the reliance of that.

[00:07:05]That's a higher value activity that artificial intelligence can replace. And then, of course, drug discovery is an even higher level of activity. Imagine if it accelerates the pace of drug development, the billions and hundreds of billions, if not trillions of dollars of value that will add to economies worldwide, which would necessitate necessitate an increased budget and spending because you're seeing the results from the value you're adding. So, we looked at the prospects for Nvidia. Now, let's take a look at valuation. So, when measuring on a forward price to earnings, it's trading at just 25.8, which looks really cheap for a business that's generating 70% revenue growth and expected to generate 30% revenue growth in the year after that with margins approaching 60% and cash flow to sales at 50%. These are super premium metrics and you typically don't see these metrics and the valuation this cheap for any business let alone one in the category of artificial intelligence.

[00:08:11]Similarly, I updated my discounted cash flow valuation model for Nvidia today and my calculation brought the intrinsic value per share to $264.

[00:08:22]That's well above the current market price of $219.

[00:08:26]So, regardless of the valuation method I'm utilizing, Nvidia stock looks undervalued. So, I've had Nvidia stock rated as a top 15 stock all this year or I shouldn't say all this year, but I upgraded Nvidia to my list of top 15 stock earlier this year. I own Nvidia stock in my portfolio. I believe it's still the largest position in my portfolio if not the second largest position in my portfolio.

[00:08:53]I probably will not be buying shares ahead of earnings, but I might. I'm not planning to, but I'm open to the idea if I get a better valuation, a better entry point, I'm interested in getting Nvidia stock ahead of earnings, but most likely I'm looking at after earnings and after I add a few other businesses to my portfolio because as I mentioned, it's my largest or second largest position.

[00:09:19]So, I'm comfortable with how much Nvidia stock I own even though I like the valuation. If I was starting from scratch, it would be one of the first stocks I would add to my portfolio.

[00:09:30]Overall, I would say if you're interested in buying Nvidia stock, whether or not you should buy before or after earnings. I would weigh my decision a little bit in favor of before earnings. I would do like a 60/40, let's say, if I was planning to invest $1,000 in Nvidia stock, I would buy $600 worth before earnings and then save $400 to purchase after earnings.