Nvidia (NASDAQ: NVDA) stock just seems to keep delivering. As I write, it’s up 9.1% pre-market following the $1.7trn company’s latest earnings release.
Its performance in the last few years has taken the market by storm. It’s up 45% alone this year. In the last 12 months, it’s jumped a whopping 225.1%.
I already own shares in the rising tech company. Right now, I’m sitting on an impressive 73.5% return. Would it be greedy of me to buy more?
Another strong performance
It’s becoming a bit of a trend for Nvidia to outperform market expectations, isn’t it? Once again, the business beat earnings estimates in the fourth quarter.
For the quarter ended 28 January, revenue reached $22.1bn, topping analysts’ estimates of $20.6bn and rising 265% from a year ago. For the year, its revenue jumped 126% to $60.9bn.
Earnings per share also outperformed forecasts, coming in at $5.16. That trumped Wall Street’s prediction of $4.64.
If that wasn’t impressive enough, net income soared 769% versus last year, to $12.3bn. That was also a 33% increase from the third quarter.
Looking forward, the business expects to keep up its strong growth in the coming quarter. It highlighted that sales are expected to top $24bn. Analysts had forecast sales of $22.17bn.
Demand is surging
Nvidia has been incredibly popular with investors. Reading the latest numbers, it’s clear to see why.
The main driving force behind its impressive performance stems from surging demand for artificial intelligence (AI) chips for servers, especially in its Data Center business, where revenues were up 409% year on year. This division includes sales of its in-demand graphics processing units (GPUs), including its latest H100 GPU.
Speaking on its performance, founder and CEO Jensen Huang stated: “Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations”.
The risks
With the amount of hype surrounding Nvidia, it would be easy to think buying its shares would come risk-free. But that’s never the case.
Investors have pushed the stock up massively in the last year or so. Every time the business releases another impressive update, it soars. However, I never invest in companies just for short-term gains. I buy for the long term. There’s always the risk it could tumble should it miss its next earnings or if there is a market correction.
The industry it operates in is fast evolving. And as quickly as Nvidia has entered the frame, so could a competitor. One of its main rivals is Advanced Micro Devices. Like Nvidia, it too has experienced exciting growth in recent times.
Being greedy?
That said, I don’t think I’m being greedy by wanting to buy more Nvidia stock today. And if I had the cash, I’d do so.
The stock has surged in recent times. And there’s plenty about the business that excites me. In the years and decades to come, I think it can continue to strengthen.
I’m wary of potential volatility. But I think Nvidia could be a winner for me over the next decade and beyond.
