Nvidia Stocks Up Today — Is It Time to Invest in the Artificial Intelligence (AI) Leader?

Nvidia (NVDA 4.14%) Stocks are rising on Thursday after the Federal Reserve’s recent interest rate cut. The company’s stock price was up 4.9% as of 3:00 PM ET.

The Fed announced yesterday that it would cut interest rates by 50 basis points — coming in more than the 25 basis point cut that many investors and analysts had anticipated. While the initial reaction to the rate cut did not spur gains for the broader market, investors quickly became more bullish after weighing the central bank authority’s move.

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 a chance to enjoy some additional commentary on the economic outlook, investors appear more confident that inflation is under control and that the economy will avoid a near-term recession.

Is Nvidia stock a buy after the Fed rate cut?

If the economy remains relatively healthy and avoids contraction, the Fed’s move to cut interest rates could help pave the way for a new bull rally fueling big gains for Nvidia stock. Of course, there is still significant uncertainty on this front, and additional risk factors, including geopolitical tensions, could inject fresh 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 grow, 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 increased demand from government customers. The company 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 the early stages of growth.

Nvidia also has major new product launches coming up in the fourth quarter. The first of the company’s Blackwell processors is expected to offer major performance and power consumption advantages over the company’s current flagship H200 processors.

With the release, customers will likely be able to get a dramatic improvement in the amount of processing power they get per dollar. But Nvidia will also be able to command a pretty penny with its next-generation processors thanks to the performance leaps it’s expected to deliver.

Blackwell’s processors could help boost margins once launched — or the company could price the new hardware aggressively to eliminate competitors’ opportunities. So while there is 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.