Nvidia (NASDAQ: NVDA) stock has been an absolute powerhouse over the past three years, gaining 431%. It’s come onto many investors’ radar only recently, but it’s been a powerhouse stock for years. After some earlier gains, many investors had probably been tempted to cash in on its success, and some surely did. Those who held out are now reaping wild rewards, and might have become millionaires many times over.
The question with these kinds of success stories is whether a company like Nvidia still has the potential to create millionaires, or is it slowing down? After all, Nvidia is the third-most valuable company in the world as of this writing, and it tipped into first place at certain points last year. Can a company this big still present enormous opportunities? Let’s evaluate it.
Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »
The name Nvidia has become synonymous with generative artificial intelligence (AI). Its graphics processing units (GPUs) can handle the large workload associated with compiling and tabulating large loads of data, the foundation of generative AI. It’s no wonder its revenue has been through the roof, and profits are matching. But it has many other products, and Nvidia was a super successful, if lesser-known, tech giant before AI became a household phrase.
In the 2024 third quarter, revenue increased 94% year over year, and earnings per share (EPS) were up 111% to $0.78. CEO Jensen Huang pointed out that AI is in “full steam” mode, and Nvidia has several AI tailwinds: Enterprises are embracing agentic AI, which employs AI in decision-making processes; industrial companies are using AI for robotics breakthroughs; and countries are adopting AI to improve infrastructure.
The AI opportunity isn’t fading away any time soon; it’s still accelerating. According to Fortune Business Insights, the GPU market was expected to reach $61.58 billion in 2024 and soar to $461.02 billion in 2032, a 28.6% compound annual growth rate (CAGR).
It’s launching its most powerful platform, the hotly anticipated Blackwell, for even larger data loads and faster computing. It’s been released to many of its partners to work on their AI systems, and Huang said the demand is “staggering.” Nvdia’s other products and segments are all brimming with potential, including AI-adjacent products like gaming products and platforms and workstations built with its GPUs.
I wouldn’t bet against Nvidia at this time, and its stock doesn’t look unreasonably expensive. At the current price, Nvidia stock trades at 31 times forward one-year earnings. Considering Nvidia’s incredible opportunities, that looks like a downright bargain.
Nvidia is clearly gearing up for a lot more growth. But can it turn $1,000 into $1 million?
For this to happen, your investment would need to gain 1,000 times its value, or 100,000%. Today, Nvidia has a market cap of $3.37 trillion. It’s not very realistic to see that increasing by 100,000%, driving the market cap into quadrillion-dollar territory. In fact, if you would have invested $1,000 in Nvidia stock 10 years ago, before its recent growth spurt, you would have just over $300,000 today. That’s nothing to sneeze at, but it’s not $1 million. If you would have invested $1,000 in Nvidia on its first day of trading, when most investors would have had no idea what it did or what kind of potential it would have, you’d have more than $3 million today.
A $1,000 investment in Nvidia stock should not lead to millionaire status in the foreseeable future, although that doesn’t mean Nvidia isn’t a great investment. You can be wealthy with less than a million in the bank, or reach the millionaire status from a larger starting investment.
Nvidia still has tons of opportunity and explosive growth potential, and it could supercharge a diversified portfolio of great stocks that together can lead to millionaire status.
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $843,960!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of January 21, 2025
Jennifer Saibil 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.
—
Blog powered by G6
Disclaimer! A guest author has made this post. G6 has not checked the post. its content and attachments and under no circumstances will G6 be held responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever (including, without limitation, any direct or indirect damages for loss of profits, business interruption or loss of information) resulting or arising directly or indirectly from your use of or inability to use this website or any websites linked to it, or from your reliance on the information and material on this website, even if the G6 has been advised of the possibility of such damages in advance.
For any inquiries, please contact [email protected]
