Consider these two motivations for swiftly acquiring Nvidia shares prior to Thursday, alongside two factors that warrant cautiousness:
Nvidia (NVDA) is set to unveil its third-quarter financial results post-market close on Wednesday, November 20, 2025. This quarterly update is undeniably one of the most eagerly awaited in 2024.
Some investors might be pondering if it's a wise move to buy Nvidia shares before Thursday, given the potential for significant gains if the Q3 results are impressive. Here are two reasons to do so, along with two reasons to exercise caution.
Reason to buy, part 1: A strong history of surpassing expectations
During its Q2 earnings briefing, Nvidia predicted Q3 revenue of approximately $32.5 billion. Wall Street, on the other hand, is rather optimistic. The average estimate of analysts surveyed by LSEG anticipates a Q3 revenue of $33.07 billion.
Unfortunately, Nvidia hasn't provided guidance for Q3 earnings. Nevertheless, analysts expect the company to announce an adjusted earnings per share (EPS) of $0.74. Even the most pessimistic analyst surveyed by LSEG estimates that Nvidia's adjusted EPS will come in at $0.72, signifying an impressive 80% growth over the previous year.
One compelling reason to consider purchasing Nvidia shares ahead of Thursday is the possibility that the company will surpass all these estimates. Analyzing Nvidia's historical performance, it's evident that the company has consistently exceeded Wall Street's earnings estimates for seven consecutive quarters.
Reason to buy, part 2: Positive signs from major clients and competitors
Occasionally, the earnings reports of a company's clients and rivals can provide insight into the company's overall performance. Reviews of the last quarterly reports from two of Nvidia's major clients and one top competitor indicate that its Q3 update might be favorable.
Amazon Web Services (AWS) is the world's largest cloud services provider, and Nvidia is one of its major GPU clients. During AWS' Q3 earnings call on October 31, CEO Andy Jassy reported that AWS has a significant demand that they struggle to fulfill due to the scarcity of chips. He went on to say that companies are "really primarily chips where companies could use more supply". Jassy then emphasized AWS' deep partnership with Nvidia.
Microsoft is the second-largest cloud services provider. In Microsoft's FY 2025 Q1 call, CFO Amy Hood announced that the demand for Azure's cloud platform "continues to be higher than our available capacity." CEO Satya Nadella highlighted Microsoft's partnership with Nvidia by stating that Microsoft's Azure was the first cloud to bring up Nvidia's Blackwell system using GB200-powered AI servers.
Lastly, Advanced Micro Devices (AMD), a major competitor of Nvidia, recently provided disheartening Q4 guidance in its latest quarterly update. However, CEO Lisa Su assured investors that their customers see significant investment in AI workloads and feel optimistic about the market.
These comments suggest that the demand for Nvidia's GPUs remains strong, with customers continuing to expand their AI infrastructure.
Reason to hesitate, part 1: Exceeding expectations might not be enough
I believe that Nvidia will surpass earnings estimates with its Q3 results, but whether this will be enough to push the stock price higher is uncertain.
In Q2, Nvidia beat the targets, even providing better-than-expected Q3 guidance. However, the share price still fell.
Wall Street's estimated earnings might be out of sync with the real numbers, leading to a decline in a company's stock if it misses these unofficial targets, nicknamed "whisper numbers".
Investors also pay close attention to anything management mentions in the quarterly conference call that might cast doubt on the future. During the Q2 call, Nvidia's executives didn't go into depth about the rumored delays of its new Blackwell GPUs, causing some concerns among investors.
Reason to hesitate, part 2: Potential Blackwell concerns
Lastly, it's worth considering holding off on buying Nvidia shares before Thursday due to potential Blackwell concerns. The Technology industry news website The Information reported on Sunday that Nvidia's Blackwell GPUs have been causing overheating issues with server hardware.
Nvidia told Reuters that the engineering iterations are to be expected. However, concerns about Blackwell revenue might arise if Nvidia fails to ease worries about hiccups in Blackwell GPUs during the Q3 call. This could result in the stock price falling on Thursday.
The bottom line
Whether or not Nvidia surpasses expectations in its Q3 results, or encounters issues with its Blackwell GPUs, a temporary price drop might occur. However, the long-term growth potential of this stock remains compelling, given the strength of its client relationships and the expanding AI market.
After analyzing the potential impacts of Nvidia's Q3 results and the performance of its clients and competitors, some investors might consider diversifying their portfolio by investing in other tech stocks. This strategy could be valuable if there are concerns about Nvidia's Blackwell GPUs causing overheating issues or if the company fails to alleviate these concerns during the Q3 call.
Alternatively, investors who believe in Nvidia's strong history of surpassing expectations and the optimistic outlook for the AI market might choose to hold onto their Nvidia shares or even increase their positions before the Q3 results are announced. This strategy could yield significant gains if Nvidia surpasses all its financial targets, as it has done consistently in the past.
