Is Nvidia a Buy After Its Blowout Earnings Report? History Offers a Strikingly Clear Answer.

Investors have gotten used to one thing in particular from Nvidia (NASDAQ: NVDA): blowout earnings reports. Thanks to the company's position as the leader in the artificial intelligence (AI) chip market, it's delivered positive earnings surprises and record numbers quarter after quarter. And the recent quarter wasn't an exception.

In Nvidia's report after market close on May 20, it announced revenue and profit that surpassed analysts' estimates and spoke of soaring demand for its chip systems. The tech giant also offered plenty of clues that support the idea of enormous growth in the quarters to come.

Considering all of this, is Nvidia -- a stock that's soared 1,400% over five years -- a buy after its blowout earnings report? History offers a strikingly clear answer.

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Nvidia's record revenue

Before we consider this key clue from history, though, let's take a look at some of the important points from Nvidia's fiscal 2027 first-quarter report. The company reported an 85% increase in revenue to a record of more than $81 billion, for the third straight quarter of year-over-year acceleration. Net income on a GAAP basis soared 211% to $58 billion, and gross margin topped 74%. Nvidia beat analysts' estimates on the top and bottom line as it's done quarter after quarter.

These numbers look great, but what's even more encouraging is the company's message. Demand remains strong for Nvidia's Blackwell system, its current major platform designed to excel at inference or the "thinking" models go through to solve problems. Nvidia says hyperscalers and frontier model creators each have put hundreds of thousands of Blackwell graphics processing units (GPUs) to work. Blackwell came at just the right time, as the AI focus shifted to inference.

And now, Nvidia's next update -- the Vera Rubin system -- may be about to follow suit. Central processing units (CPUs) play an important role in powering agentic AI, seen as the next growth driver for AI. This is the software that actually performs tasks on behalf of humans. Nvidia, with Rubin, is launching its position in the CPU market. The system includes CPUs and Nvidia's famous GPUs as part of a package designed to supercharge agentic AI. Nvidia aims to start shipping Rubin in the third quarter, and chief executive officer Jensen Huang says the platform is "off to a tremendous start."

"Full confidence" in $1 trillion

Nvidia says it has "full confidence" in its forecast for $1 trillion in revenue from Blackwell and Rubin platforms from 2025 through the 2027 calendar year.

So Nvidia's situation is looking very positive -- but is now, after this fantastic earnings report, a good time to get in on the stock? Well, history shows us that Nvidia shares have a track record of falling in the five trading days following an earnings report. After the past 12 quarterly reports, the stock fell seven times.

Considering that Nvidia has delivered explosive growth in recent years and spoken of more gains to come, any such decline could offer investors an interesting buying opportunity. A look at Nvidia's valuation today, for example, shows that it's already interesting at 26x forward earnings estimates. So any decrease from here could make valuation even more attractive for potential investors.

Meanwhile, history shows us another interesting trend. Over the longer term, Nvidia has a track record of gains. After the past 11 quarterly reports, the stock has climbed eight times over the next six months. (Six-month stock performance isn't yet available for the period following the fiscal 2026 fourth-quarter report.)

All of this suggests that by investing in Nvidia right after its earnings report, you may get in on the stock at an interesting price -- and go on to win in the months to follow. Of course, it's important to keep in mind that history isn't always right. Nvidia stock could soar in the coming days and flounder in the months to come.

But the most important point of all is that performance over a period of days or even months won't impact your long-term returns by very much -- so investors shouldn't worry if Nvidia stock doesn't surge after the latest blowout report. Instead, it's a better idea to focus on the company's prospects over the years to come -- and that's reason to get excited about this top AI stock.

Adria Cimino 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.