Should You Buy Nvidia Stock Before Oct. 17?

There's no denying the growing chorus of experts suggesting that artificial intelligence (AI) will change just about everything. Some veteran analysts and tech aficionados have gone so far as to suggest we're in the throes of the fourth industrial revolution. These sophisticated algorithms have the potential to dramatically increase productivity by automating time-consuming processes and streamlining a great many tasks.

There are plenty of companies that have profited from the accelerating adoption of AI, but arguably none more than Nvidia (NASDAQ: NVDA). The company pioneered the graphics processing units (GPUs) that provide the computational horsepower that makes AI possible. Simply put, these computer chips can conduct lightning-fast mathematical calculations, which enables the creation and running of complex AI models.

There have been any number of catalysts that sent the chipmaker higher, and this Thursday could mark yet another. Let's look at what's coming down the pike and whether it could signal (another) big move for Nvidia stock.

The writing is on the wall

Taiwan Semiconductor Manufacturing (NYSE: TSM), commonly referred to as TSMC, is the world's largest contract semiconductor foundry and is responsible for the vast majority of AI chips, producing an estimated 90% of the world's most advanced processors. Nvidia ranks among TSMC's biggest customers, accounting for about 11% of the company's sales in 2023 -- though that number is likely higher now. As such, TSMC's performance will likely be a canary in the coal mine, providing insight into the trajectory of Nvidia's results.

TSMC is scheduled to release its third-quarter financial report on Thursday, and the available evidence suggests the results will be robust.

The company provides a monthly revenue report, so we already have a pretty fair idea of how things are going. For the three months ended Sept. 30, the company generated revenue of NT$759.7 million (roughly $23.6 million), which represents growth of roughly 39% year over year, based on current exchange rates. For context, that's slightly ahead of analysts' consensus estimates of $23.09 billion, or growth of about 35%. It's also ahead of TSMC's own forecast, which called for $22.8 billion at the midpoint of its guidance.

The fact that TSMC will likely surpass the high end of its own guidance suggests the demand for chips that process AI remains robust -- which bodes well for Nvidia.

There's more. Nvidia CEO Jensen Huang has been making the rounds on financial media, providing updates regarding the company's next-generation Blackwell architecture. "Blackwell is in full production, Blackwell is as planned, and demand for Blackwell is insane," the chief executive said in a recent interview. Analysts from Morgan Stanley are projecting that Nvidia will generate $10 billion from Blackwell chips during the company's fiscal 2025 fourth quarter, which ends in late January.