This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

On the heels of a recent rally, Apple (NASDAQ: AAPL) stock's market capitalization climbed above the $4 trillion level for the first time in the company's history this week. As of this writing, Apple's market cap is now ahead of Microsoft's, which just dipped back to just below $4 trillion. Meanwhile, Nvidia is sitting at the top of the heap with a market cap of approximately $4.95 trillion, having fallen back a bit after topping $5 trillion earlier in the week.

In addition to news of strong sales for the company's iPhone 17 lines, there's another huge catalyst that has helped Apple's valuation surge to a new all-time high, with the company joining the illustrious ranks of the $4 trillion club. 

Apple is surging on improved China outlook

Over the last week, President Donald Trump and administration officials have made comments suggesting that it's likely that the U.S. will be able to reach a trade agreement with China in the near future. If so, that would be great news for Apple.

Tense relations between the U.S. and China have contributed to relatively sluggish sales performance for Apple's hardware in the Chinese market as shoppers in the territory have increasingly opted for domestic brands. While Apple is making big investment commitments to expand its manufacturing capabilities in the U.S., the tech giant still relies on Chinese factories for a large percentage of its hardware manufacturing. As a result, the company stands to face some significant headwinds if high tariffs remain in place.

With signs that tensions between the U.S. and China could de-escalate in the near term, some of the biggest potential headwinds facing Apple could be alleviated. On the other hand, investors should keep in mind that there is still the potential for unfavorable twists and turns when it comes to U.S.-China relations -- and Apple could face valuation volatility if signs emerge that the dynamic is souring again. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Key Points

• Nvidia has been a huge winner over the last five years.
• Nvidia's leadership in GPU technologies has translated to huge valuation gains.

Nvidia (NASDAQ: NVDA) has been the most important company when it comes to pushing the artificial intelligence (AI) revolution forward. While many leading tech players develop advanced AI software, Nvidia has a clear-cut leadership position when it comes to designing the advanced graphics processing units (GPUs) that serve as the foundational hardware used for training and powering AI applications.

Thanks to the surge in demand and excitement surrounding AI technologies, Nvidia has seen massive sales and earnings growth over the last five years. In turn, these performance wins have helped power explosive gains for the company's share price.

What would a $10,000 investment in Nvidia five years ago be worth now?

Nvidia has posted a total return of roughly 1,290% over the last five years. That means that a $10,000 investment made exactly half a decade ago would now be worth more than $139,470.

With a market capitalization of roughly $4.34 trillion, Nvidia currently ranks as the world's largest company by a substantial margin. While it's impossible to predict exactly where the AI hardware market will head over the next five years, it looks like Nvidia is poised to retain a strong leadership position in the near term.

In addition to its market-leading strengths in the GPU category, the company looks poised to continue broadening its strengths in software and service categories While it would be a tall order to expect Nvidia to repeat its stock performance over the last five years again over the next half decade, it wouldn't be surprising to see the company significantly outperform the broader market across the stretch. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Tesla (NASDAQ: TSLA) stock saw a substantial pullback across this year's first half. The company's share price fell 21.3% across the first six months of 2025, according to data from S&P Global Market Intelligence. The sell-off came even as the S&P 500 index climbed 5.5% over the stretch.

Tesla stock surged in the latter half of 2024 in anticipation of political tailwinds connected to the presidential election and President Trump's victory in the race, but the gains set the stage for a significant pullback this year, as political dynamics shifted and vehicle sales came in at underwhelming levels.

Tesla stock sank due to vehicle deliveries and political headwinds

Tesla kicked off January with its deliveries update for last year's fourth quarter and announced that it had delivered 495,570 vehicles in the period. While the performance marked an increase from the 484,507 vehicles it delivered in the prior-year quarter, 2024 still wound up being the first year in which the company's total deliveries decreased.

The company then published its Q1 performance update in April and reported that it had delivered 336,681 vehicles in the period -- down 13% year over year. Vehicle sales this year have looked particularly weak in European markets, and it seems that CEO Elon Musk's activities in the political realm may have had a significant negative impact on the company's brand.

Factors including rising competition from Chinese manufacturers also played a role in Tesla's sell-offs across this year's first half. The company did launch its robotaxi service in Austin, Texas toward the end of June, but the service's launch hasn't been able to support a sustained rally for the stock yet.

What's next for Tesla?

At the beginning of this month, Tesla published vehicle production and delivery updates for the second quarter. The business delivered approximately 384,122 vehicles in the period, representing a year-over-year decline of roughly 14%. Meanwhile, the business produced 410,244 vehicles in the period -- down slightly from the roughly 411,000 vehicles produced in Q2 of the previous year.

Even though the company saw substantial declines for deliveries in the quarter, the results were better than some analysts had feared and actually helped support gains for the stock. The company's share price has also seen significant moves in relation to developments surrounding Elon Musk's relationship with President Trump, and there's a good chance that political catalysts will continue to spur moves for the stock in the near term. Tesla stock has seen some significant swings in July, and its share price is now up roughly 1.3% across this month's trading as of this writing.

As of this writing, Tesla has a market capitalization of roughly $1.04 trillion and is valued at approximately 10.8 times this year's expected sales. Given recent declines for vehicle deliveries, the company's current valuation comes with a high amount of risk. On the other hand, investors are betting that Tesla's robotaxi project and other growth bets will pave the way for the business to score huge wins outside of its core electric vehicle market.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

On the heels of huge gains yesterday, Tesla (NASDAQ: TSLA) stock saw big sell-offs in Thursday's trading. The electric-vehicle (EV) company's share price was down 9.9% as of 1:15 p.m. ET amid the backdrop of a 5.3% decline for the S&P 500 (SNPINDEX: ^GSPC) and a 6.1% decline for the Nasdaq Composite (NASDAQINDEX: ^IXIC).

While President Donald Trump issued a 90-day suspension of reciprocal tariffs for other countries yesterday, he announced that the import tax rate on products from China would be raised from 104% to 145%. The previous tariff rate was already extremely high, and the move to raise import taxes on China even higher is highlighting rapidly deteriorating relations with the U.S. and the potential for conditions to continue worsening. As of this writing, Tesla stock is now down 39% across 2025's trading and 48% from its valuation peak.

Is Tesla stock a buy right now?

Despite a big valuation pullback, Tesla stock is still trading at approximately 95.5 times this year's expected earnings and 7.4 times this year's expected sales. Given relatively weak performance for the business recently and concerns that the company's brand may have been significantly damaged by CEO Elon Musk's foray into politics, the company's valuation multiples suggest that the stock is still very risky.

While the launch of a new vehicle model sometime this quarter could provide a significant positive sales catalyst, Tesla stock still looks too expensive if you're valuing the company primarily based on the core EV business. On the other hand, the auto specialist is in the early stages of rolling out its self-driving robotaxi business -- and robotics projects could be a meaningful growth driver further out. The robotaxi service could become a powerful earnings driver for Tesla, but it doesn't make sense to buy the stock if you don't think the company will score big wins on that front.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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• Why ASX investors dumped IVV ETF last month

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Nvidia (NASDAQ: NVDA) stock is getting hit with sell-offs in Thursday's trading (US time). The company's share price was down 5.1% as of 2 p.m. ET amid a 2% decline for the S&P 500 and a 2.5% decline for the Nasdaq Composite.

Investors are selling out of artificial intelligence (AI) and semiconductor stocks today after Marvell Technology saw a big valuation pullback despite posting better-than-expected Q4 results and guidance. The negative reaction to Marvell's earnings report has spurred sell-offs for AI stocks, and Nvidia's share price is taking a hit as investors signal the need for higher growth to support valuation levels amid macroeconomic and geopolitical risk factors.

Nvidia stock falls after Marvell plummets despite a solid Q4 report

Marvell's non-GAAP (adjusted) earnings per share of $0.60 in the fourth quarter topped Wall Street's call for per-share earnings of $0.59, and sales of $1.82 billion exceeded the average analyst forecast by $20 million. But investors weren't satisfied with annual growth of approximately 27% for sales and 33% for adjusted earnings.

Marvell's guidance also wasn't hot enough to support bullish sentiment despite beating the average Wall Street forecast. The chip specialist targeted revenue of approximately $1.875 billion, which beat the consensus forecast for sales of $1.87 billion. Management's guidance for an adjusted gross margin of 60% suggests that earnings should be strong in the period, but the outlook wasn't enough to prevent big sell-offs for Marvell -- and the pullback is extending to Nvidia and other AI stocks.

Why is the market's reaction to Marvell's results bearish for Nvidia?

Marvell is a leading provider of connectivity chips and other solutions that have been seeing demand tailwinds in conjunction with the rise of AI. As a result, the company's performance has come to be viewed as an indicator for overall demand trends in the artificial intelligence space.

While the company's recent fourth-quarter report points to a strong near-term outlook, the market's reaction to its Q4 performance and forward guidance suggests that investors are feeling more cautious about valuations for AI stocks -- and that's weighing on Nvidia's share price.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Marvell Technology. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Nvidia (NASDAQ: NVDA) stock was heading lower in Tuesday's trading. The company's share price was down 2.8% as of market close against the backdrop of a 0.47% decline for the S&P 500 index and a 1.35% decline for the Nasdaq Composite index. The artificial intelligence (AI) leader's stock had been down as much as 4.5% earlier in trading.

Nvidia stock was slipping on Tuesday as investors considered the potential impacts from new tariffs, new Chinese chip sanctions, and other pressures. The tech giant is also due to report its fourth-quarter report after the market closes on Wednesday, and investors are feeling some jitteriness when it comes to valuation profiles for AI stocks.

Is Nvidia stock a buy right now?

Nvidia's fourth-quarter release tomorrow is poised to be one of the biggest stock market events in 2025 so far. The average analyst estimate calls for the business to post net income of approximately $21.1 billion on sales of over $38 billion. The company's forward guidance will also be under the microscope and treated as a key indicator for overall growth in the AI market.

Investors are on the edge of their seats. A recent report that Microsoft is cutting back on some of its data centre expansion plans has raised growth concerns, and Nvidia's Q4 report has taken on even more significance following the market disruption caused by the DeepSeek R-1 model in January.

To summarise, there are a lot of catalysts on the near horizon that could cause significant volatility for Nvidia stock. Accordingly, the stock probably isn't a good fit for investors without high risk tolerance right now.

On the other hand, the company continues to occupy a leadership position in the graphics processing unit market at the heart of the AI revolution, and it's still in the early stages of expanding its presence in categories including software, processing services, and robotics. The company's advantages in key artificial intelligence categories are significant, and these technologies still look poised for massive long-term growth. Investors should move forward with the knowledge that Nvidia stock has the potential to be volatile in the near term, but it looks like a worthwhile buy-and-hold investment on recent pullbacks.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Microsoft and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Microsoft and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The Tesla (NASDAQ: TSLA) share price was revving higher in Thursday's trading. The electric vehicle (EV) leader's share price was up 5.9% as of market close amid a 1.04% gain for the S&P 500 index and a 1.5% gain for the Nasdaq Composite index.

The Tesla share price gained ground following a recent report suggesting that the company could be on track to receive a $400 million contract through the U.S. State Department. However, subsequent developments are casting doubt on whether the deal will actually go through. The stock also got a boost from bullish analyst coverage.

Is Tesla getting a $400 million State contract for armored vehicles?

Late Wednesday, reports emerged that Tesla would receive a $400 million contract to provide armored EVs for the State Department. The department's 2025 procurement forecast had a segment titled "Armored Electric Vehicles" and listed $400 million for Tesla as one of its planned expenses in the category.

However, it now looks like the contract may not materialise. For starters, the State Department amended its spending forecast — renaming the "Armored Electric Vehicles" section "Armored Car Services" and removing Tesla from the list of companies that are slated to see deals through the department. Notably, Tesla was the only one of the companies listed in the section to have its forecast deal removed.

CEO Elon Musk also followed up with commentary on the matter, saying that there was no $400 million Armored Tesla contract in the works. But while Musk has poured water on the deal, some investors may be betting that the EV leader will wind up securing other State contracts.

Tesla share price climbs on positive analyst coverage

In a note published Wednesday, Wedbush Analyst Daniel Ives reiterated his outperform rating and one-year price target of $550 per share for Tesla stock. As of this writing, Ives' price forecast suggests additional upside of roughly 54%.

Ives expects that the close relationship between Musk and the Trump administration will help pave the way for the EV company to see huge benefits connected to federal autonomous vehicle programs. The analyst expects that this dynamic alone will unlock over $1 trillion in valuation gains for Tesla in the coming years. He also sees robotics and artificial intelligence (AI) as key growth catalysts for the company.

With today's gains, Tesla's valuation has been pushed up to roughly $1.12 trillion. That looks like a potentially risky valuation given that growth for the company's EVs in the commercial market has stalled recently, but the tech leader has some other big growth drivers on the horizon that could help it beat expectations.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Tesla (NASDAQ: TSLA) shares were making big gains in Wednesday's trading. The electric vehicle (EV) company's share price was up 5.4% as of 3 p.m. ET before ending the session 2.44% higher. This was amid the backdrop of a 0.27% decline for the S&P 500 index and a 0.03% gain for the Nasdaq Composite index.

Despite pressures from higher-than-expected inflation data for January, Tesla's valuation climbed higher today thanks to political catalysts. In addition to a presentation held by CEO Elon Musk and President Donald Trump at the White House yesterday, the EV stock is also getting a boost from new legislation recently proposed by Republican senators.

Tesla stock climbs after White House address from Trump and Musk

At the Oval Office yesterday, Trump said that he was signing an executive order that would give expanded powers to the Department of Government Efficiency (DOGE) that Musk is leading. The new order will see federal agencies coordinating and consulting with DOGE on job cuts and making adjustments to limit additional hiring.

Trump and Musk also took questions from reporters at the event. While yesterday's Oval Office address and executive order announcement don't signal any immediate business benefits for Tesla, investors see the close relationship between the president and Musk as a positive for the company.

New taxes on EVs could actually benefit Tesla

Tesla stock also seems to be getting a boost from another unusual source today -- a proposal for new taxes on the sale of electric vehicles. Some Senate Republicans have proposed new legislation that would implement a $1,000 tax on new EV sales in order to fund road repairs. While that could create some sales pressures for Tesla, it could actually be good for the company in the long run.

As the far-and-away leader in the U.S. EV market, Tesla enjoys economies of scale and brand advantages that trounce the competitive field. As a result, the company is significantly less price sensitive and significantly more profitable. So while a $1,000 tax on EV sales would be a near-term headwind for Tesla, it would be a much bigger challenge for its competitors -- some of which are still taking large losses on each vehicle they sell. If smaller competitors wind up facing a more challenging operating backdrop, it would likely have the effect of strengthening Tesla's long-term position in the EV market.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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• Why ASX investors dumped IVV ETF last month

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Shares of Nvidia (NASDAQ: NVDA) saw another round of sell-offs in Wednesday's trading. The stock was down 4.03% as of market close amid the backdrop of a 0.47% decline for the S&P 500 index and a 0.51% pullback for the Nasdaq Composite index.

Nvidia stock was losing ground amid multiple bearish catalysts related to the DeepSeek R1 artificial intelligence (AI) model that was released last week. For starters, investors are weighing the possibility that DeepSeek's new AI signals a significantly weaker demand outlook for Nvidia's advanced AI processors than previously expected.

Compared to leading AI systems from U.S. companies, including OpenAI and Microsoft, the R1 model was reportedly developed and trained on a smaller number of less powerful processors. It's also said to be significantly more efficient in terms of the processing power and cooling that it needs to run.

At the same time, DeepSeek R1 is delivering performance that's matching or exceeding OpenAI's most recent ChatGPT system, which was previously the gold standard for generative artificial intelligence and reasoning systems.

Adding another bearish catalyst, the DeepSeek story is highlighting rising geopolitical tensions between the U.S. and China and the significance of AI as a battleground for the competing world powers. According to Fox News, Sen. Josh Hawley, a Missouri Republican, introduced a bill today that would end cooperation between the two countries on AI and prohibit U.S. investment in Chinese AI initiatives.

Is this a big opportunity to buy Nvidia stock?

DeepSeek R1's emergence has had a rapid radical impact on the narrative surrounding Nvidia stock. While it's possible that the new software system is delivering a major breakthrough in AI efficiency, it's still too early to determine whether it's really a paradigm shift that will coincide with weaker demand for Nvidia's advanced graphics processing units (GPUs).

Moreover, I think there's a good chance that investors will actually benefit from backing Nvidia stock and taking a more sceptical stance on the new Chinese AI model.

The key details about how DeepSeek's R1 was built and trained and its processing requirements are still largely unknown. With the AI race emerging as a focal point in the battle between the U.S. and China, it's not unreasonable to think that some information about the model's origination and efficiency has been misrepresented.

Given massive purchases of Nvidia processors and overall AI infrastructure spending and future forecasts from tech leaders including Microsoft and Meta Platforms, there seems to be a good chance that high-performance GPUs will continue to be central to creating and running advanced artificial intelligence systems.

The impact that DeepSeek is having on the market this week highlights real risk factors and catalysts for volatility, but I expect that the dynamics between the U.S. and China will ultimately prove to be more significant than the individual tech elements of R1.

These dynamics will likely continue to create volatility for Nvidia and other leading AI stocks. But the artificial intelligence battle also has the potential to be a powerful long-term catalyst for the stock. So while there's more uncertainty in the air surrounding the AI leader's future at the moment, I think today's pullback in Nvidia is another worthwhile buying opportunity.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Keith Noonan has no position in any of the stocks mentioned. 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. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Meta Platforms, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Several artificial intelligence (AI) chip stocks saw broad sell-offs in Monday's trading. Nvidia (NASDAQ: NVDA), Taiwan Semiconductor Manufacturing (NYSE: TSM), and Micron (NASDAQ: MU) were among the big names participating in the pullback and were down 1.97%, 3.36%, and 4.31%, respectively, as of market close.

Semiconductor stocks were getting hit with a wave of bearish pressures following news that the U.S. will take new steps to limit the export of advanced chips used for AI. Nvidia, Micron, and TSMC occupy important positions in the AI chip space, and each company saw a significant valuation pullback today.

Nvidia, Micron, and TSMC fall on expanded AI chip regulations

Before the market opened this morning, U.S. officials announced they would be implementing new regulations that will put additional restrictions on the export of AI chips and semiconductor manufacturing equipment. The move is aimed at maintaining technological advantages for the U.S. and its allies and limiting AI progress for China and other adversarial countries.

The new regulations will put a hard cap on the number of AI chips that can be exported to countries including China, Russia, Iran, and North Korea. Meanwhile, close U.S. allies will have unrestricted access to advanced semiconductors and manufacturing equipment for artificial intelligence technologies. The new regulations will take effect 120 days after their initial publication.

Given the news, it's not surprising that Nvidia, Micron, and TSMC saw sell-offs today. While each company operates in a different corner of the semiconductor industry, they're all playing an important role in the design and production of advanced processors that are at the foundations of the AI revolution.

Nvidia is the leading designer of high-performance graphics processing units (GPUs) for AI data centres. While there are other players in the space, the company has a dominant technology and market share lead and stands as the most influential hardware designer in the space. Restrictions were already in place that prevented the company's most advanced processors from being shipped to China, and the new regulations look poised to expand the breadth of the export limitations.

Meanwhile, Micron is a leading producer of memory solutions. The company's high-bandwidth memory (HBM) chips are included in some of Nvidia's most advanced processors, and other memory and storage solutions from the tech specialist are also being used in AI data centers.

Compared to Nvidia and TSMC, Micron could wind up seeing less direct impacts from the new regulations. But while it's possible that the company's memory chips won't be specifically included in the expanding ban list, the business could still wind up facing a tougher growth environment because its chips are included as components in processors from Nvidia and other AI leaders.

TSMC's position amid rising tensions between the U.S. and China could be particularly fraught. TSMC dominates the market when it comes to the manufacturing of advanced AI chips. While there are many companies that design their own semiconductors, very few have the capacity to fabricate their own chips.

Because TSMC offers technological performance and reliability advantages, most AI chip designers choose the company to manufacture their chips. As a Taiwan-based company, TSMC has close geographical proximity to China and has become a centerpiece in the country's increasingly adversarial relationship with the U.S.

What does the U.S.-China dynamic mean for Nvidia, Micron, and TSMC?

Geopolitical dynamics are perhaps the single most important risk factor for AI chip investors. While near-term demand in the space continues to look robust and the long-term growth outlook remains very strong, rising tensions between the U.S. and China could create substantial valuation pressures. Along those lines, developments concerning Taiwan and TSMC are particularly important.

China has long held that Taiwan is part of its territory -- a position that the government of the relatively small island nation disagrees with. With TSMC the world's leading manufacturer of high-performance AI chips, the dispute has taken on added significance.

Leadership in AI has emerged as a key national security and economic issue, and TSMC's dominance when it comes to advanced chip fabrication means that it is one of the world's most important companies. If China were to move to exert greater control over Taiwan and TSMC's chip fabrication plants, it would likely create powerful bearish pressures on AI chip stocks and the market at large. While it's not clear that such a scenario will necessarily play out, geopolitical risks are a key factor that could shape the performance of some of the market's hottest artificial intelligence stocks.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Nvidia stock and these AI chip shares just sank appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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• 3 fantastic ASX ETFs to buy this month
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• Why now could be the time to buy these popular ASX ETFs

Keith Noonan has positions in Micron Technology. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Nvidia (NASDAQ: NVDA) shares were falling in Tuesday's trading. The artificial intelligence (AI) leader's share price was down 6.22% as of market close amid a 1.11% decline for the S&P 500 index and a 1.89% pullback for the Nasdaq Composite index.

Nvidia stock was losing ground due to a "buy the rumour, sell the news" dynamic. The company's share price had climbed higher Monday in anticipation of CEO Jensen Huang's keynote address at the start of the CES conference. While the tech leader actually had some exciting news to share with investors and show attendees, the news wasn't enough to sustain gains for the stock on Tuesday.

On the hardware side, Nvidia mostly focused on its new graphics processing units (GPUs) for gaming and consumer PC applications. Given that the company's advanced GPUs for AI data centre applications have been the driving force behind its incredible stock gains, it's not shocking that investors have been a bit let down by what's been spotlighted so far. But Tuesday's stock move suggests investors may be overlooking some huge opportunities for the company.

Is Nvidia's stock pullback a buying opportunity for 2025?

While Nvidia's upcoming GB300 processor for data centre AI applications hasn't been getting the CES spotlighting some investors have been hoping for, the company has continued to show why it's one of the most important and exciting players in the tech sector. The GPU leader's hardware initiatives have naturally received most of the focus from industry watchers and investors, but it's the AI pioneer's software initiatives that have emerged as its most exciting projects at CES.

Nvidia is positioning itself as a leader in software services for robotics, industrial automation, and category-specific AI worker agents. The company's CUDA platform for leveraging GPUs for AI already gives the tech giant strong software foundations and a formidable competitive moat, but its software initiatives in other categories still appear to be broadly underappreciated. Nvidia is using its dominant position in AI hardware and interfacing tools to establish forefront positions in some of today's most exciting software categories.

Given Nvidia shares hit a record high in Monday's trading, the pullback isn't a dramatic development -- and some strong performance is already priced into the company's valuation. On the other hand, the AI leader has actually served up some very exciting news at CES, and its competitive positioning and growth opportunities have never looked stronger. For long-term investors, Tuesday's pullback could be a worthwhile buying opportunity in part of a larger dollar-cost-averaging strategy.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post With Nvidia shares sinking, is this a buying opportunity? appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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• 5 ASX ETFs that could supercharge your portfolio
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• 3 fantastic ASX ETFs to buy this month
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• Why now could be the time to buy these popular ASX ETFs

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Nvidia (NASDAQ: NVDA) shares were climbing in Tuesday's trading following news about the company's Blackwell processors and bullish coverage from analysts. The company's share price was up 4.89% as of market close.

Reports emerged today that recently highlighted overheating issues with Nvidia's next-generation Blackwell processors had actually been identified and resolved months ago. In addition to this promising news, the artificial intelligence (AI) leader's stock received price-target increases from two high-profile financial firms. Nvidia is scheduled to report its third-quarter results after the market closes tomorrow, and its share price is now up roughly 200% across this year's trading.

Is Nvidia stock still a buy?

Nvidia has been this year's hottest and most influential mega-cap stock. The company is now launching its next-generation Blackwell graphics processing units (GPUs), and expectations are high heading into the company's Q3 report tomorrow. Today's news suggesting that reported overheating issues for the Blackwell processors had actually already been addressed is a promising indicator, and the bullish momentum was strengthened by positive coverage from two high-profile analyst firms.

Citing a strong demand outlook heading into 2025, Truist raised its one-year target on Nvidia shares from $148 to $167 per share. Stifel was even more bullish, maintaining a buy rating on the stock and raising its one-year price target from $165 per share to $180 per share.

With its last quarterly update, Nvidia guided for sales of roughly $32.5 billion in Q3 -- good for year-over-year growth of roughly 80%. The company also targeted a non-GAAP (adjusted) gross margin of approximately 75%, and performance in the category will be under the microscope as investors look for indications as to whether the company can sustain the strong pricing power that it's enjoyed amid the AI boom. Investors should approach Nvidia shares with the understanding that Wall Street's expectations are even higher than Nvidia's own guidance, and it's possible that the company's share price could slip even if the AI leader beats the average analyst sales and earnings estimates.

As a long-term investment, Nvidia shares still hold plenty of promise. The company has a dominant position in the market for advanced GPUs for AI applications, and its industry-leading software platform gives it competitive advantages that complement its hardware performance lead. On the other hand, the stock could be volatile coming out of earnings, and investors may want to adopt a dollar-cost-averaging strategy rather than buying a large amount of stock all at once.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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• 5 ASX ETFs that could supercharge your portfolio
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Tesla (NASDAQ: TSLA) stock is making big gains in Wednesday's trading. The electric-vehicle (EV) company's share price was up 22.8% as of 12:30 p.m. ET. Meanwhile, the S&P 500 index was up 2.1%, and the Nasdaq Composite index was up 2.4%.

Tesla stock is surging following Donald Trump's victory in the 2024 presidential election. The Republican candidate outperformed most expectations, winning the national popular vote in addition to a decisive win in the electoral college.

Why Tesla stock surged on Trump's election victory

While there isn't any fresh business-specific news for the EV leader today, CEO Elon Musk was an active supporter and campaigner for Trump in the election -- and some analysts think that the Republican's victory in the race will open opportunities for Musk's company. Musk campaigned for Trump and celebrated the victory with the Republican last night. He's also indicated that he could have a role in the new presidential administration.

In response to election results, Wedbush published a bullish note on Tesla stock. Ahead of the market opening today, the firm's analysts anticipated a strong bullish momentum for Tesla's share price in the day's trading and also highlighted the potential for longer-lasting positive catalysts for the company.

What comes next for Tesla?

As noted in Wedbush's bullish, election-related note on Tesla, it's possible that new tariffs implemented by the incoming Trump administration could have some beneficial impacts for the business. While the costs for some parts could increase, tariffs could have the effect of making it harder for Chinese EVs to gain market share.

Notably, Wedbush said that Trump's presidency could be a net negative for the broader EV industry. The firm's analysts expect that EV rebates and tax incentives could be rescinded under the incoming administration. While this could hurt overall demand for EVs, it could actually strengthen Tesla's competitive positioning and make it more difficult for rivals to gain ground in the market.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock just skyrocketed appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Microsoft (NASDAQ: MSFT) stock is slipping in Thursday's trading following the company's recent quarterly report. The tech giant's share price was down 5.4% as of 3 p.m. ET.

After the market closed yesterday, Microsoft reported results for the first quarter of its current fiscal year -- which ended Sept. 30. While sales and earnings for the period came in ahead of Wall Street's expectations, investors aren't satisfied with the company's forward guidance.

Microsoft posts strong growth in fiscal Q1

Microsoft posted earnings per share of $3.30 on revenue of $65.59 billion, beating the average analyst estimate's call for per-share earnings of $3.11 on revenue of $64.56 billion. The company's revenue was up roughly 16% year over year in the period, and earnings per share were up 10% compared to last year's quarter. The business posted operating income of $30.6 billion in the period -- good for a margin of roughly 46.7% and up 14% compared to Q1 last year.

Microsoft's Intelligent Cloud business was once again the standout growth driver. Segment sales increased 20% year over year to reach $24.1 billion. Within the segment, sales for the Azure cloud infrastructure business rose 34%.

Meanwhile, sales for the productivity and business processes segment came in at $28.3 billion, up 12% year over year. Revenue for the personal computing segment rose 17% year over year to reach $13.2 billion. Overall, it was a very strong quarter for the company, but management's forward guidance doesn't appear to have lived up to Wall Street's lofty expectations.

But Wall Street wasn't satisfied with Microsoft's cloud and AI guidance

For the current quarter, Microsoft expects growth for the Azure business to come in between 31% and 32% -- decelerating from the 34% growth rate it posted last quarter. Overall revenue for the Intelligent Cloud segment is expected to be up between 18% and 20% year over year.

The company expects artificial intelligence (AI) sales to be roughly in line with performance last quarter, and it looks like investors were hoping for meaningful sequential growth. Along with rising spending on AI infrastructure, the guidance shortfall is causing Microsoft stock to lose ground today. On the other hand, management said that it expects Azure's growth to accelerate in the second half of the fiscal year. For long-term investors looking to build exposure to AI trends, today's pullback could present a worthwhile buying opportunity.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Microsoft. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Nvidia (NASDAQ: NVDA) stock jumped 3.97% on Thursday following the Federal Reserve's recent interest rate cut.  

The Fed announced yesterday that it would be cutting interest rates by 50 basis points -- coming in higher than the 25-basis-point cut that many investors and analysts had anticipated. While the initial reaction to the rate cut didn't spur gains for the broader market, investors quickly became more bullish after weighing the move from the central banking authority.

Investors have been eagerly awaiting a pivot to rate cuts as a potential bullish catalyst for the stock market and growth stocks in particular. After getting the chance to soak up some additional commentary on the economic outlook, investors are seeming more confident that inflation is under control and that the economy will avoid a recession in the near term.

Is Nvidia stock a buy after the Fed's rate cut?

If the economy stays relatively healthy and avoids contraction, the Fed's shift to rate cutting could help pave the way for a new bull rally that spurs big gains for Nvidia stock. Of course, there's still significant uncertainty on that front, and additional risk factors including geopolitical tensions could inject new bearish sentiment despite the rate cut.

But while investors shouldn't take the rate policy pivot as a clear indicator that Nvidia will continue to surge, the business is firing on all cylinders and continues to look like a worthwhile artificial intelligence (AI) stock for long-term investors. In addition to strong demand from hyperscale cloud companies and other large enterprises, Nvidia will likely see rising demand from government customers. The company has highlighted the importance of having "sovereign AI" as a key national priority for governments around the world, and spending from public sector customers is likely still in early stages of ramping up.

Nvidia also has major new product releases set to hit in the fourth quarter. The first of the company's Blackwell processors are expected provide major performance and power-consumption advantages compared to the company's current top-of-the line H200 processors.

With the release, customers will likely be able to get a dramatic improvement in the amount of processing power they're getting per dollar. But Nvidia will also be able to command a pretty penny with its next-gen processors thanks to the performance leaps that are expected to be delivered.

The Blackwell processors could help boost margins once released -- or the company could price the new hardware aggressively to stamp out opportunities for competitors. So while there's uncertainty about what moves the broader market will make in the near term, Nvidia's competitive positioning in AI continues to look very strong and opens the door for strong returns.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Nvidia share price surges — Time to invest in the artificial intelligence (AI) leader? appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Nvidia (NASDAQ: NVDA) stock posted big gains in Wednesday's trading. The artificial intelligence (AI) leader's share price closed out the daily session up 8%, according to data from S&P Global Market Intelligence.

Nvidia stock gained ground in conjunction with a report from Semafor that the U.S. was considering lifting restrictions on the sale of advanced semiconductors to Saudi Arabia. If so, it would open up a new market for the AI company.

Nvidia's valuation also got a significant boost thanks to comments made in a presentation by CEO Jensen Huang. Speaking at the Communacopia and Technology Conference hosted by Goldman Sachs, Huang stated that his company was continuing to see incredible levels of demand.

He also issued encouraging guidance for Blackwell, the company's next-generation processors. Huang said that Blackwell's manufacturing has already ramped up, the chips are set to begin shipping to customers in significant numbers in Q4, and demand among customers is very high.

The Nvidia CEO also said that his company was approaching its designs with fabrication versatility in mind. The company currently relies on Taiwan Semiconductor Manufacturing to manufacture its chip designs, but it says it's taking steps to ensure it can move to other fabs if necessary.

Is Nvidia stock a buy right now?

On the heels of some recent volatility for the stock, Jensen Huang gave Nvidia investors a lot of reassuring news today. The report about Nvidia's chips potentially being greenlit for sale in Saudi Arabia also highlights untapped growth opportunities among government customers.

Nvidia has been serving up stellar sales and earnings growth that has powered incredible share price gains, but that's also raised questions among investors about how long the momentum can be sustained. Today's favorable news developments helped allay concerns and power big gains for the stock, and I think Nvidia still offers attractive upside at current prices.

The company continues to have a clear lead in the advanced graphics processing unit (GPU) space, and the long-term demand outlook for its GPUs and emerging technology and service offerings remains very favorable. Recent volatility for the stock highlights that expectations are very high, but the company looks poised to deliver another big leap forward in processing with its Blackwell chips -- and it could be laying the foundations for long-term dominance in the AI space.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Nvidia (NASDAQ: NVDA) stock is moving higher in Wednesday's trading despite volatility. The company's share price was up roughly 1% as of 2:15 p.m. ET, according to data from S&P Global Market Intelligence. Earlier in the day's session, it had been up as much as 4.9% and down as much as 3.6%.

Nvidia's stock gains today come on the heels of yesterday's big sell-offs triggered by macroeconomic fears. While rebound momentum could be a significant factor in the valuation increase, news that one of the company's rivals is failing to match its processing performance is also helping to push the stock higher.

Nvidia stock is seeing high levels of volatility

Nvidia stock got rocked yesterday as investors weighed underwhelming U.S. manufacturing data and concerns the Labor Department will release disappointing jobs numbers on Friday. While it now seems clear that the Federal Reserve will deliver a substantial interest rate cut at its meeting this month, investors are no longer confident it will provide enough of a bullish catalyst to send the market higher. Instead, concerns that the U.S. economy is heading for recession took center stage yesterday.

Nvidia stock fell 9.5% on Tuesday, shaving roughly $279 billion off its market capitalization. While many companies have seen much larger single-day declines on a percentage basis, the sell-off marked the largest pure-dollar valuation decline in market history.

The artificial intelligence (AI) leader's stock actually opened lower today due to news that the company had received notice that the Department of Justice was ramping up an investigation into whether its dominance in the graphics processing unit (GPU) market constituted a violation of antitrust laws. But news that its technologies continue to significantly outperform rival offerings helped power a recovery.

Nvidia still has a significant AI processing lead

The Financial Times published a report today stating that Huawei customers were facing challenges after moving away from Nvidia's hardware and software. According to the report, the Chinese tech giant is facing complaints about the performance of its chips and related software platforms.

The U.S. has established export restrictions that prevent Nvidia's most advanced processors from being exported to China. As a result, China's government and companies operating within the country have been looking for workarounds -- and chips designed by Huawei have emerged as a prominent alternative. But it looks like Huawei's chips are still significantly behind Nvidia's reliability and processing power when it comes to use cases for advanced AI applications.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Nvidia Corp (NASDAQ: NVDA) stock was getting hit hard in Tuesday's trading (overnight our time in the United States). The semiconductor company's share price was down 8.7% at 2.15pm ET, according to data from S&P Global Market Intelligence.

The artificial intelligence (AI) leader's share price was falling in response to rising concerns about the health of the US economy. News out of China and other geopolitical dynamics also prompted sell-offs for Nvidia and other chip stocks.

Investors are feeling jittery ahead of this week's jobs report

The US Department of Labor is expected to release its latest employment data on Friday, and Wall Street is seeing an uptick in bearish sentiment ahead of the report. Investors have been looking forward to interest-rate cuts that are expected to be delivered by the Federal Reserve this month, and the rate reduction could be larger than many analysts initially expected. But there's a catch.

Some analysts now expect that the Fed will cut interest rates by a full point this year. If so, that could be a sign that the central banking authority believes the economy is on track for a recession. Investors are bracing for a worrying jobs report at the end of this week, and Nvidia and other high-profile growth stocks are seeing big valuation pullbacks.

Concerns that China will invade Taiwan hit chip stocks again

In an interview on Sunday, Taiwanese President Lai Ching-te said that China should also move to reclaim land from Russia if it wants to officially make Taiwan its territory.

Rather than suggesting that China should take back Russian land that used to be within its own borders, Lai was making a statement about whether the Chinese government was being logically consistent in some of its stated reasons for plans to exert greater control over Taiwan. Nevertheless, it looks like the comments from Taiwan's president are highlighting the risk that China could invade Taiwan at some point in the not-too-distant future.

While the Chinese government has long made claims that Taiwan is already part of its territory, the contention has taken on added importance in light of the crucial role that Taiwan plays in semiconductor manufacturing and artificial intelligence trends.

The island nation is home to Taiwan Semiconductor Manufacturing -- the leading contract manufacturer of semiconductors that's responsible for the fabrication of advanced chips for AI applications. Nvidia relies on TSMC for the fabrication of its chips, and any disruptions to the fab leader's output could have major implications for the company's performance.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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• 3 fantastic ASX ETFs to buy this month
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

After the market closed today, Nvidia (NASDAQ: NVDA) published results for the second quarter of its current fiscal year -- which ended July 28. The red-hot artificial intelligence (AI) company has once again delivered big sales and earnings beats.

Nvidia's revenue surged 122% year over year, and its non-GAAP (adjusted) earnings per share rocketed 152% higher to hit $0.68. Meanwhile, the average analyst estimate as polled by LSEG had called for the business to report sales of $28.7 billion and earnings of $0.64 per share.

The artificial intelligence (AI) leader beat the midpoint Wall Street sales target by 4.5% and the midpoint earnings target by 6.25%. The company also crushed its own guidance, which called for revenue of $28 billion and an adjusted gross margin of 75.5%.

Nvidia serves up more huge wins in data center AI

Nvidia's data center segment was once again the standout performance driver in Q2. Segment sales increased 154% year over year to hit $26.3 billion and accounted for 87.7% of overall revenue. Sales were also up 16% on a sequential quarterly basis. With tech giants including Microsoft, Amazon, Meta Platforms, and Alphabet investing heavily to remain at the forefront of artificial intelligence, demand for Nvidia's AI-focused graphics processing units (GPU) has been sky-high.

Nvidia's GPUs have become the foundational hardware powering the artificial intelligence (AI) revolution, and the company has a stark performance lead when it comes to delivering processors to power today's most advanced artificial intelligence applications. Thanks to the dominance of its CUDA software platform for utilizing GPUs for AI and other accelerated computing applications, the company has created an ecosystem with a clear-cut performance edge and high switching costs. If the company can continue pairing meaningful hardware advantages with industry-standard software tools, its competitive moat will be very tough to breach.

While competitors, including Advanced Micro Devices and Intel, are trying to gain share in the data center GPU market, there's little sign that either is dampening Nvidia's momentum in the space. Some estimates put the company's share of the AI GPU and accelerator market at 95% or higher.

Nvidia's other segments also contributed to the blowout quarter

While the data center segment was the key standout and performance driver, Nvidia's other segments also posted encouraging results. Sales for the gaming segment increased 16% year over year to $2.9 billion and made up roughly 10% of quarterly sales in the period. Meanwhile, sales for the professional visualization segment rose 20% year over year to hit $454 million, and revenue from the automotive and robotics segment jumped 37% to hit $346 million.

The sales contributions from these other segments may seem relatively small compared to what's happening in the data center, but they're still significant. Lofty expectations from Wall Street analysts and other investors mean that Nvidia needed to be firing on all cylinders with its Q2 report, and the company has delivered.

What comes next for the red-hot AI leader?

In addition to blockbuster Q2 results, Nvidia issued performance targets for fiscal Q3. The company is guiding for sales to come in at approximately $32.5 billion -- suggesting annual growth of around 80%. Management is also guiding for an adjusted gross margin of 75% and adjusted operating expenses of roughly $3 billion.

As with its Q2 results, Nvidia's forward guidance looks very encouraging. The AI frontrunner's sales guidance comfortably exceeds the average analyst estimate's call for revenue of $31.7 billion in the period, and its gross margin target suggests that the business is seeing little erosion of pricing power when it comes to data center GPUs and accelerators. For comparison, the business posted an adjusted gross margin of 78.9% in this year's first quarter and a margin of 75.7% in Q2.

Nvidia is now shipping samples of its next-generation Blackwell chips, and the company expects that the new hardware will be its most successful product ever. While there's still some uncertainty about the release timing for its first Blackwell processors, the new platform is poised to be a major driver of sales and margins. Nvidia has passed the test with its recent quarterly report, and the company has never looked stronger.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Advanced Micro Devices, Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Intel and has recommended the following options: long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short November 2024 $24 calls on Intel. The Motley Fool Australia has recommended Advanced Micro Devices, Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Nvidia (NASDAQ: NVDA) is the world's leading provider of advanced processors for artificial intelligence (AI) and data center applications. Strong demand for its graphics processing units (GPUs) has helped boost its share price massively in the past couple of years, including a gain of roughly 156% so far across 2024's trading.

With a market capitalization of roughly $3.12 trillion as of this writing, it's also the world's second-largest company -- trailing behind only Apple. And with Nvidia stock delivering such impressive share price gains, it's easy to overlook that it also pays a dividend.

Yes, Nvidia is a dividend stock (but just barely)

The fact that Nvidia receives little attention as a dividend stock isn't surprising. The company's quarterly payout is just $0.01 per share, or $0.04 on an annual basis. Based on its current stock price, that works out to a yield of just 0.03%.

On the heels of the 10-for-1 stock split that it completed in June, Nvidia now has an outstanding share count of roughly 24.6 billion. Based on that share count, the company will wind up paying out roughly $984 million to shareholders through dividends this year.

While no one is buying Nvidia stock for its dividend today, it's possible that the company could dramatically increase its payout over time. Right now, it makes much more sense for the company to devote its capital to developing new hardware and software to strengthen its position in artificial intelligence, data centers, and other business categories. The semiconductor leader's investments in these categories have spurred sales and earnings growth that have been far more rewarding for investors than dividend payments would have been.

On the other hand, returning more cash directly to shareholders may become more sensible when Nvidia's business becomes more mature and its growth rates slow. Tech giants including Apple and Microsoft have followed that path, and it wouldn't be surprising to see Nvidia make dividend payments a bigger part of stock ownership over the next decade.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post How much will Nvidia pay out in dividends this year appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.