Nvidia stock is straining to break out to new highs. The fourth quarter should bring several catalysts that can help the chip maker get there.
Shareholders should be watching a couple of potential factors in the coming months. Obviously there's Nvidia's own earnings, expected in mid-to-late November. In its previous report, the company surprised the market with an upbeat forecast for revenue to grow by approximately 70% in fiscal 2028. Progress on that goal and maintaining its sky-high margins will be key.
Arguably more important is the expected initial public offering of Claude-developer Anthropic, which is currently scheduled for November, according to The Wall Street Journal.
A successful IPO would calm nerves around the sustainability of AI spending and give greater insight into how much money Anthropic and peers can spend on Nvidia's artificial-intelligence chips. Nvidia agreed to invest up to $10 billion in Anthropic late last year, which CNBC reported at the time put Anthropic's valuation at around $350 billion. Anthropic is widely expected to look for a valuation of around $2 trillion on the public market.
History is on Nvidia's side-the last three months of the year have often been the stock's best period, recording an average fourth-quarter gain of 22% in data going back to 1999, according to Dow Jones Market Data. Over the last five years, it has recorded an average fourth-quarter gain of 17%.
Nvidia was a Barron's stock pick in May when shares traded around $226 with a forward price-to-earnings ratio of about 24 times. It now trades at a forward multiple of 16.8 times, according to FactSet.