NVIDIA's AI Revolution: Trillion-Dollar Stock to Consider

Published Date : 2/10/2025 

Since 2023, NVIDIA (NASDAQ: NVDA) has surged nearly 1,200%, driven by its AI GPUs and CUDA software platform. History suggests this trillion-dollar stock is a no-brainer buy. 

History can be an amazing teacher on Wall Street for those willing to listen. Although what happened in the past doesn't often repeat to a 'T' in the future, things do have a way of rhyming for the stock market. While nothing comes with a guarantee when investing, data from Crestmont Research shows that every rolling 20-year period for the benchmark S&P 500, when back-tested to 1900, has generated a positive total return, including dividends. This means that if an investor had hypothetically purchased an S&P 500-tracking index at any point between 1900 and 2005 and simply held for 20 years, they'd have made money every single time!

History can also be a helpful guide when it comes to Wall Street's leading businesses. Just 10 public companies traded on U.S. exchanges have ever joined the trillion-dollar club, including all members of the 'Magnificent Seven,' Berkshire Hathaway, Broadcom, and Taiwan Semiconductor Manufacturing. Based solely on what history tells us, one of these trillion-dollar stocks, which has been powered higher by the artificial intelligence (AI) revolution, is treading in dangerous territory. At the same time, another trillion-dollar AI stock makes for nothing short of a no-brainer buy.

Since 2023 began, few stocks have been hotter than NVIDIA (NASDAQ: NVDA). Shares of the company have rallied nearly 1,200%, with its market cap climbing by almost $4.2 trillion. NVIDIA's path to becoming the world's largest publicly traded company has everything to do with its graphics processing units (GPUs). Its Hopper (H100), Blackwell, and Blackwell Ultra AI-GPUs serve as the brains that fuel split-second decision-making in enterprise AI-accelerated data centers, as well as the training of large language models (LLM). With demand for AI-GPUs outpacing their supply by a substantial sum, NVIDIA has had little trouble netting $40,000 or more for each of its high-powered chips.

NVIDIA's CUDA software platform has also played a role as its unsung hero. This is the toolkit developers are using to maximize the compute potential of their GPUs, as well as to build and train LLMs. Without CUDA, NVIDIA might have a hard time keeping developers contained within its ecosystem of products and services. The combination of cutting-edge hardware and robust software has solidified NVIDIA's position as a leader in the AI revolution, making it a compelling investment for long-term investors.

While the stock's meteoric rise has raised concerns about overvaluation, the demand for AI solutions is expected to continue growing exponentially. NVIDIA's strategic positioning in the AI market, coupled with its strong financial health and innovative capabilities, suggests that the company is well-prepared to sustain its growth trajectory. For investors looking to capitalize on the AI boom, NVIDIA remains a top contender in the trillion-dollar club.

Image source: Getty Images. 

Frequently Asked Questions (FAQS): 

Q: What is the S&P 500 and why is it important?

A: The S&P 500 is a stock market index that tracks the performance of 500 large-cap U.S. companies. It is widely regarded as the best representation of the U.S. stock market and is a key benchmark for investors.

Q: What are AI GPUs and why are they important for NVIDIA?

A: AI GPUs (Graphics Processing Units) are specialized chips designed to handle complex AI tasks. NVIDIA's AI GPUs, such as the Hopper and Blackwell series, are crucial for training large language models and accelerating data center operations, driving significant revenue for the company.

Q: What is CUDA and how does it benefit NVIDIA?

A: CUDA is NVIDIA's parallel computing platform and programming model. It allows developers to leverage the power of NVIDIA GPUs for a wide range of applications, including AI and scientific computing. CUDA helps NVIDIA maintain a strong ecosystem and developer base.

Q: How has NVIDIA's stock performed since 2023?

A: Since the beginning of 2023, NVIDIA's stock (NASDAQ: NVDA) has surged nearly 1,200%, driven by the high demand for its AI GPUs and the overall growth in the AI market. This has made NVIDIA one of the most valuable companies globally.

Q: What are the risks of investing in NVIDIA despite its strong performance?

A: Despite its strong performance, investing in NVIDIA carries risks such as market volatility, competition from other tech giants, and the potential for overvaluation. However, the company's leadership in AI technology and robust financial health mitigate some of these risks. 

More Related Topics :