Nvidia (NASDAQ: NVDA) has ignited the financial world with its remarkable surge in share value of nearly 400% in just under 14 months. This meteoric rise has left investors contemplating the potential of Nvidia to generate substantial wealth. The company’s dominance in the AI chip market, boasting a share of over 80%, has propelled its ascent. With the AI narrative still in its nascent stage, Nvidia’s potential for continued growth is a tantalizing prospect.
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The Evolution from Gaming to AI
Nvidia has traversed a lengthy journey, initially etching its mark in the gaming and graphics spheres. The company’s GPUs, designed for handling multiple tasks simultaneously, found perfect resonance in applications requiring high-speed and visually stunning imagery.
However, the transformative potential of GPUs transcended gaming and graphics, emerging as pivotal components in the realm of AI. Nvidia’s GPUs have assumed a pivotal role in “deep learning” — the process of inundating AI models with extensive datasets to empower them to execute complex tasks and resolve intricate problems.
Nvidia’s offerings encompass not only chips but complete platforms, empowering companies and developers with the capabilities of AI. Furthermore, tailor-made solutions catering to diverse industries, such as the BioNeMo generative AI drug discovery platform, resonate with pharma and biotech firms. Additionally, strategic partnerships with tech heavyweights like Amazon‘s Amazon Web Services (AWS) and Microsoft Azure have broadened the accessibility of Nvidia’s solutions.
This strategic bonanza has translated into a surge in Nvidia’s earnings. For instance, the company reported a monumental surge in revenue to over $18 billion in the third quarter of the fiscal year, with net income skyrocketing to more than $9 billion — a remarkable increase of approximately 1,000%. Notably, data center revenue, encompassing Nvidia’s AI products and services, reached an unprecedented high of over $14 billion.
Facing Challenges and Rivals
Undoubtedly, Nvidia’s shares have undergone a stratospheric rise, mirroring its outstanding performance. However, the crucial question looming over the company pertains to its capacity to sustain this momentum, especially in the face of potential impediments posed by rivals or external factors.
Nvidia is indeed confronted with challenges, such as the U.S. embargo on the sale of certain chips to China, which is poised to impact nearly a quarter of data center sales. Although Nvidia anticipates a downturn in the fourth quarter due to this restriction, it envisages compensatory growth in other regions.
Nvidia’s Unassailable Chip Supremacy
While rivals, including Advanced Micro Devices and Nvidia’s partners like AWS, have also ventured into AI chips, Nvidia remains at the vanguard with its unparalleled swiftness. The company’s unwavering commitment to substantial investment in research and development fortifies its position at the forefront.
Although pockets of deceleration in growth might be anticipated at intermittent intervals, I am disinclined to perceive such occurrences as a precedent. Instead, Nvidia’s preeminent position, comprehensive array of AI products and services, and robust investments in R&D are expected to galvanize revenue growth in the ensuing years, consequently propelling the stock price.
Returning to our primary question — could Nvidia materialize as a millionaire-maker? Placing undue reliance on the meteoric rise of a single stock to spawn considerable wealth is a gamble of colossal proportions, one that I would refrain from endorsing despite promising prospects. The likelier path to ascending to millionaire status entails investing in a diverse portfolio of high-quality stocks — accumulating up to 20 or more over time, if possible — and persevering for the long term.
Should Nvidia find a place within this roster, it holds the potential to catalyze substantial wealth accumulation, if not millionaire status. By adopting this prudent approach, investors are poised to considerably augment their wealth. Therefore, making a foray into the realm of the AI giant Nvidia, even after its astounding winning streak, is improbable to leave one with pangs of regret.
Should you invest $1,000 in Nvidia right now?
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
