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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.
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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.