Is Nvidia Stock a Buy Before May 28?

Core Viewpoint - Nvidia has significantly benefited from the AI hype cycle, generating billions through hardware design, but faces challenges from Chinese competition and international trade disputes [1] Financial Performance - Nvidia's shares are down approximately 10% from an all-time high of $149 in January, with the upcoming first-quarter earnings report on May 28 expected to provide insights into future performance [2] - In the fiscal fourth quarter, Nvidia's revenue increased by 78% year over year to $39.3 billion, driven by demand for Blackwell GPUs [3] - Fourth-quarter profits rose 73% to $22.1 billion, showcasing the company's ability to maintain high margins [4] - Management projects first-quarter revenue of $43 billion (±2%), surpassing analyst expectations of $41.8 billion and representing a 62% increase from the previous year [5] Challenges and Risks - Long-term challenges include the impact of the Trump administration's "reciprocal tariff" policy and competition in China, which may not have been fully accounted for in the company's guidance [6] - The ban on sales of H20 chips to China could result in a potential loss of up to $15 billion in sales, with an expected $5.5 billion impairment charge in the first quarter [8] - Despite these challenges, Nvidia remains committed to the Chinese market, viewing it as a $50 billion annual opportunity, and plans to release a downgraded version of its H20 in China [9][10] Market Position and Valuation - Nvidia's forward price-to-earnings multiple is 31, slightly above the S&P 500 average of 24, which is considered relatively affordable given the company's growth rate and the ongoing excitement in the AI sector [11]