Nvidia Stock Is Gaining Today -- Is It Too Late to Invest in the Artificial Intelligence (AI) Leader?

Nvidia (NASDAQ: NVDA) stock is 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 4.6% as of 3:30 p.m. EST.

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 196% across this year's trading.

Is Nvidia stock still a buy?

Nvidia has been this year's hottest and most influential megacap 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 stock from $148 per share 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 the stock 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 stock still holds 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.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.