We recently compiled a list of the 10 Most Profitable Stocks of the Last 10 Years. In this article, we are going to take a look at where NVIDIA (NASDAQ:NVDA) stands against the other profitable stocks.

In an interview with CNBC on October 14, Michael Kantrowitz, Chief Investment Officer at Piper Sandler noted that while the market is expensive, it's not a reason to get bearish and that unless a risk arises, the market will likely stay expensive. Kantrowitz explains that the market's valuation is driven by the pricing out of risks that existed two years ago, such as inflation and higher interest rates. He believes that if these risks were to resurface, it would be a reason to get worried, but currently, that's not the backdrop.

He also notes that investors should focus on stocks with continued earnings momentum, as these names will likely see the best outperformance and can hold their expensive multiples for longer. Kantrowitz is not too concerned about higher bond yields but notes that they can be a problem at some point. He thinks that yields would need to reach 4.25% to show up in the broader market.

Regarding earnings revisions, Kantrowitz believes that revisions coming down have not overdone it and that it's normal to see estimates from the sell-side start out high and then trickle down throughout the year. He expects to see more downward earnings revisions but notes that large-cap stocks have held up far better in terms of earnings, which is why they continue to outperform.

Tom Lee, Managing Partner and Head of Research at Fundstrat Global Advisors discussed the markets and his recent observations. Lee believes that the market's resilience is due to the large amount of cash on the sidelines. He thinks that investors have been under-invested in stocks and that the market is becoming less dependent on macro data.

Lee pointed out that the market has been able to shrug off negative news and that the recent PPI and CPI reports were not enough to knock the market off track. He believes that the Fed will continue to be dovish, especially since inflation is still tracking towards the 2% target. Lee also thinks that the election, which is becoming less of a coin toss, is also contributing to the market's conviction.

Regarding the impact of the election on the market, Lee believes that markets like visibility, but they also need to like what they see on the other side of the election. He thinks that whether Trump or Harris wins, stocks will do well next year, but there will be differences in sector and asset class performance depending on who wins.

While some may be concerned about the market's expensive valuation, others see it as a sign of strength and resilience, with that in context, let’s take a look at the 10 most profitable stocks of the last 10 years.

Our Methodology

To compile our list of the 10 most profitable stocks of the last 10 years, we used the Finviz and Yahoo stock screeners to compile an initial list of the 30 largest companies by market cap. From that list, we narrowed our choices to companies with positive TTM net income and 10-year net income growth informed by reputable sources, including SeekingAlpha, which provided insights into 10-year growth rates, and Macrotrends, which supplied information on trailing twelve-month (TTM) net income. Our list is sorted in ascending order of the 10-year net income growth rates.

Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 smallcap and largecap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

A close-up of a colorful high-end graphics card being plugged in to a gaming computer.

NVIDIA (NASDAQ:NVDA)  

10-Year Net Income CAGR: 58.47%  

TTM Net Income: $53.01 Billion  

Number of Hedge Fund Investors: 179  

NVIDIA (NASDAQ:NVDA) is a global leader in graphics processing units (GPUs) and a pioneer in AI, gaming, and data center technology. The company’s GPUs are widely utilized in gaming, deep learning, and high-performance computing. NVIDIA’s (NASDAQ:NVDA) AI and machine learning solutions have been adopted across various industries, including healthcare, automotive, and finance. Notable customers include Amazon Web Services, Google Cloud, and Tesla.

NVIDIA (NASDAQ:NVDA) is positioned for ongoing growth, driven by its strong presence in the data center market and the upcoming Blackwell chip. Blackwell is highly sought after by companies such as OpenAI, Microsoft, and Meta, who are building AI data centers to support their products. The Blackwell GPUs, priced between $30,000 and $40,000 each, are already being distributed to data centers and industrial customers for AI applications, with consumer availability expected in 2025.

In a CNBC interview, CEO Jensen Huang remarked that "Blackwell is in full production and demand for Blackwell is insane," adding, "Everybody wants to have the most and everybody wants to be first." NVIDIA’s (NASDAQ:NVDA) leadership in accelerated computing and generative AI is also a key factor in its growth outlook.

NVIDIA (NASDAQ:NVDA) is poised to benefit from the expanding enterprise AI market, along with growing opportunities in the automotive and healthcare sectors, as its products and solutions gain traction in these areas.

In Q2, global spending on cloud infrastructure rose by 19% year-over-year to $78.2 billion, according to Canalys. Hyperscalers are expected to spend approximately $160 billion on AI infrastructure in 2024.

With its robust position in the data center market and emerging opportunities in various industries, NVIDIA (NASDAQ:NVDA) is well-positioned to capitalize on these trends and drive further growth. Analysts estimate that the company’s earnings will grow by 81.88% this year. With a consensus Buy rating from industry analysts, the stock has a target price of $148.53, which represents a 12.08% upside potential from its current level.

Overall NVDA ranks 2nd on our list of the most profitable stocks of the last 10 years. While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.

Disclosure: None. This article is originally published at Insider Monkey.