Over the past few weeks, investors have been eagerly awaiting various companies to release their third-quarter results. Factors such as the election and high-profile themes of artificial intelligence (AI) have added an extra layer of ambiguity to this specific earnings season.

For the most part, the big tech reports have been pretty strong. But the “Magnificent Seven“The member that everyone is most interested in has not yet reported: Nvidia (NVDA -1.60%). This will change on November 20.

This particular earnings report might be more meaningful than the usual report. Here’s what investors should be looking for, and my thoughts on whether they should buy stocks before the highly anticipated data drop takes place.

Why this earnings report is so important

Over the past two years, Wall Street analysts and investors who follow Nvidia have focused on growth trends in its compute and networking businesses. In particular, sales related to the company’s data center services and graphics processing units (GPUs) seem to be all anyone wants to talk about.

The next earnings report will be no different. When CEO Jensen Huang and CFO Colette Kress address investors on the earnings call, I can pretty much guarantee that executives will be filled with questions about one specific thing: the upcoming launch of its chip line Blackwell, Nvidia’s most powerful GPUs to date.

Although early reports suggest that Blackwell could generate $10 billion in revenue by the end of the year, there will be a finer detail that I would encourage investors to watch for.

One of Nvidia’s closest partners is an IT infrastructure company Super microcomputer. Supermicro specializes in providing storage cluster architectures that host GPUs such as those made by Nvidia. However, over the past few months, Supermicro has been at the center of some drama. Indeed, the company delayed the filing of its annual report and was abandoned last week by its auditor.

In response, Nvidia reportedly moving some of its supply chain efforts away from Supermicro for the benefit of other computer architecture specialists. While this seems like a logical move, I’ll be curious to see if this transition will impact Nvidia’s performance. financial advice linked to Blackwell in any way.

Image source: Getty Images.

How does Nvidia stock typically perform in its earnings reports?

The chart below tracks Nvidia’s stock price over the past two years, with annotations indicating when its quarterly reports were due.

NVDA data by Y charts.

As it releases its earnings, investors may see that Nvidia’s stock price tends to experience a bit more volatility and momentum. In my eyes, Nvidia’s comments on Supermicro and Blackwell could influence the stock price quite dramatically one way or another.

Think long term

The main idea at play here is that Nvidia stock has risen significantly over the past couple of years and the stock price has shown good resilience, even after some short-lived sell-offs.

While Nvidia multibagger the returns over the past two years certainly make this stock tempting, investors should keep in mind that competition in the GPU space is increasing. While this won’t be too detrimental to Nvidia, new chips from other vendors could hamper the company’s growth in the future.

Ultimately, I think investors should listen carefully to any comments from Nvidia executives regarding Blackwell that might help them understand how these new GPUs will perform in the face of growing competition. For me, buying Nvidia ahead of its next earnings report carries too much risk – a decision more suited to a short-term trader than a long-term investor.

For this reason, I would stay away with Nvidia for now and encourage investors to continue to gather as much information as possible before following the crowd.