Adoption of artificial intelligence (AI) continues apace, but some are waiting for the other shoe to drop. A strengthened U.S. economy and robust quarterly results from several AI-related companies helped promote Nasdaq Composite to a new record last week. However, these factors have some investors wondering if the bull market has gone too far, too fast.

Nvidia (NASDAQ: NVDA) became the de facto standard bearer of Generative AI industry. The company is scheduled to report its fiscal 2025 third-quarter results in less than three weeks, and it’s no exaggeration to suggest that Wall Street is waiting for clues the report will provide about the state of AI adoption. Nvidia’s sales have surged since the start of last year, driving the stock up 833% (as of this writing). It’s also less than 5% off the all-time high it hit late last month.

There’s a lot going on in Nvidia’s upcoming financial report, and many shareholders are wondering if the stock can continue its amazing run. Is it worth picking up the stock ahead of its financial report on November 20? Fortunately for investors, data has begun to accumulate that may help answer that question.

Image source: Getty Images.

Sunshine on a cloudy day

The key to Nvidia’s astonishing successes over the past two years has been its performance graphics processing units (GPUs)which are the best chips for providing the specific type of computing power needed for generative AI as well as other types of cloud computing needs. The resources required and sheer scale of data involved limit leading AI models to the world’s largest technology companies and cloud providers — most of whom are Nvidia customers. Comments made along with recent quarterly results from those tech giants offer some insights into the state of the AI ​​revolution – and the evidence is clear.

For example, Microsoft (NASDAQ: MSFT) said it spent heavily to advance its AI agenda in the first quarter of fiscal 2025 (which ended on September 30). The company had capital expenditure (capex) of $20 billion, which was mainly to support “cloud and AI” demand. CFO Amy Hood expects Microsoft’s spending streak to continue: “We expect capital spending to increase sequentially given our demand signals for cloud and AI,” she said.

During Alphabethis (NASDAQ: GOOGL) (NASDAQ: GOOG) On the third-quarter earnings call, CEO Sundar Pichai said, “Realizing (the) AI opportunity requires … significant capital investment.” The company disclosed $13 billion in investments during the quarter and suggested there would be “substantial increases in capital investment … through 2025.”

Rounding out the big three cloud providers is Amazon (NASDAQ: AMZN). During his Q3 earnings call, CEO Andy Jassy called generative a “maybe once-in-a-lifetime type of opportunity … we’re aggressively pursuing it.” CFO Brian Olsavsky put that into context, saying Amazon’s investments will total about $75 billion this year, with much of that going toward cloud computing and AI infrastructure. The company also said it will unveil “100 new cloud infrastructure and AI capabilities” at AWS re:Invent later this month.

Finally, there is Meta platforms (NASDAQ: META). Although not a cloud provider, the company’s social media sites attract 3.29 billion people every day, providing Meta with large volumes of user data. The company raised its full-year investment outlook to about $39 billion, and CFO Susan Li said, “We continue to expect significant capital spending growth in 2025.” She previously noted that this was “to support our AI product research and development efforts.”

Why it matters

The trend towards accelerating investment to support the growing demand for AI is clear. Additionally, much of that money will be spent on the data centers and servers needed for cloud computing — where most generative AI software lives. As such, Nvidia will likely receive a large portion of these expenses.

In the past, Nvidia has kept its biggest customers, but that hasn’t stopped Wall Street from probing. Analysts at Bloomberg and Barclays Research crunched the numbers and concluded that Nvidia’s four biggest customers — generating a combined 40 percent of its sales — are:

• Microsoft: 15%

• Meta platforms: 13%

• Amazon: 6.2%

• Alphabet: 5.8%

Each of these companies has left no doubt about their plans to spend heavily on capital expenditures and, in particular, to spend heavily on infrastructure to support their cloud computing and AI aspirations. As the leading provider of data center GPUs, Nvidia will likely continue to top the list of beneficiaries of this spending.

Mark your calendar

Nvidia will provide its next set of quarterly results on November 20. After achieving triple-digit year-over-year growth for five consecutive quarters, the company tried to tame market expectations, suggesting that this time its revenue growth would only reach around 79%. While that would be a deceleration, it would also be a remarkable increase by any stretch of the imagination.

Investors looking to cash in over the next three weeks may be disappointed. No one can say for sure how Nvidia stock will react to the report — even if the company beats expectations.

For a reminder of the difficulties involved in short-term forecasting, investors need only look back to this summer, when, since mid-June, Nvidia’s stock has lost as much as 27% of its value on fears that Blackwell’s new generation AI. processors would be delayed — only to come back. It was an illustration that with this stock, volatility is part of the cost of admission. That said, both the comments made by its big tech customers and their historical spending patterns suggest that Nvidia has strong growth ahead.

For investors looking for stocks to hold for years and decades, rather than weeks and months, Nvidia is a clear choice to benefit from the AI ​​revolution. And trading at about 32 times next year’s earnings, it’s still attractively priced. I can’t say for sure what stocks will do between now and November 20th. What I can say — with a degree of confidence — is that investors who buy nvidia stock soon and hold onto it for three to five years or more will be very glad they did.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a board member of The Motley Fool. Suzanne Frey, chief executive at Alphabet, is a member of the Motley Fool’s board of directors. Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a board member of The Motley Fool. Danny Vena has positions in Alphabet, Amazon, Meta Platforms, Microsoft and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft and Nvidia. The Motley Fool recommends the following options: long $395 January 2026 Microsoft calls and short $405 January 2026 Microsoft calls. The Motley Fool has a disclosure policy.