Nvidia (NVDA 0.80%) has established itself as a successful investment over time, climbing more than 2,700% over the past five years. And the momentum has strengthened since this major chip designer has announced triple-digit profit growth quarter after quarter. This is due to the dominance that Nvidia has built in the artificial intelligence (AI) chip market, with the company now holding around 80% share.

And Nvidia is not only winning in AI chips, but also in the entire AI market, which is expected to grow from $200 billion today to $1 trillion by the end of the decade. Indeed, Nvidia offers a wide variety of products and services suitable for any company developing an AI platform. Speaking on a BG2 podcast earlier this month, CEO Jensen Huang called the company an “on-ramp” to the world of AI.

Next up for Nvidia is the company’s third-quarter earnings report, scheduled for November 20. Investors will focus on earnings numbers, Nvidia’s ability to hit its gross margin target, and commentary on a major upcoming product launch. Should you buy Nvidia stock ahead of this key report? Let’s take a look at what history tells us.

Image source: Getty Images.

What investors want from Nvidia

First, let’s consider what investors want from the tech giant. Nvidia expects double-digit revenue growth, slower than recent triple-digit growth. But it’s important to keep in mind that comparison quarters are getting tougher, with Nvidia’s latest third quarter already generating more revenue than the company made in an entire year just a few years ago – during the 2021 financial year. Double-digit growth should therefore be recorded. still considered an extremely strong performance at this point in Nvidia’s history.

The company, which reported a gross margin of 75% last quarter, aims to maintain a margin level above 70%. It forecasts a gross margin of around 70% for the third quarter and the full year. This level of profitability along with double-digit revenue growth should boost investor confidence in this leading technology player.

Finally, investors will be looking for feedback on the upcoming launch of Nvidia’s Blackwell architecture and the most capable chip ever made. So far, so good – Nvidia’s Huang said on the last earnings call that demand was outpacing supply and that’s expected to continue into next year.

Nvidia stock could do so after the next earnings report

Now let’s take a look at how Nvidia stock might react to the November 20 earnings report. And one way to do that is to look at Nvidia’s historical trends following these reports. Looking back over the last eight quarters, Nvidia stock rose six times in the month following the report’s release. And four of those times, the stock posted double-digit gains.

It’s important to note that stocks don’t always follow historical trends. So while these results suggest that Nvidia could rise if the company releases positive news, this is not guaranteed. It is impossible to predict short-term stock performance because stocks and the market are known to surprise us.

So now, back to our question. Should you buy Nvidia before November 20? Historical trends give us reason to be optimistic about a near-term gain, but more importantly, investors should consider Nvidia’s performance potential over the long term.

Why Nvidia should continue to show strong growth

Revenue growth trend and solid gross margin could continue in the future, and here’s why. Nvidia is already a leader, with customers willing to wait to get their hands on the latest product, and the company is committed to innovating every year. On top of that, Nvidia is poised to become more efficient as the company moves past Blackwell’s early production and launch stages and processes become increasingly routine. This should help Nvidia maintain its wide margins.

All of this means that if you buy before November 20 and get an increase, that’s fantastic. But if the stock stagnates or declines after the report or if you buy Nvidia at a later date and miss a post-earnings rally, don’t worry. Short-term movements won’t have much impact on your returns over time. Nvidia is therefore an excellent buy for investors before or after November 20 because the company has what it takes to excel in the long term.