Could Nvidia Stock Help You Become a Millionaire? | The Motley Fool (2024)

Nvidia has delivered remarkable gains to shareholders in the past, but what can we expect in the future?

Buying solid companies and holding on to their shares for a very long time is a proven way to make money in the stock market, as this simple strategy helps investors take advantage of the power of compound growth and also capitalize on disruptive and secular growth opportunities.

Nvidia (NVDA 5.88%) is a prime example of what a successful buy-and-hold investment can deliver over the long run. An investor who put $10,000 into Nvidia stock a decade ago and held on would be sitting on a position worth more than $1.8 million right now and more than $1.9 million with dividends reinvested.

Could Nvidia Stock Help You Become a Millionaire? | The Motley Fool (1)

NVDA data by YCharts.

But can Nvidia replicate this feat and help new investors become millionaires if they start with a $10,000 investment?

Is it realistic to expect such massive gains from Nvidia again?

Nvidia has grown by leaps and bounds over the past decade, and now, with a market cap of just over $2.25 trillion, it's the third-largest company in the world. So for Nvidia to grow by 100 times from here, its market cap would have to exceed $200 trillion. That looks absurd: Last year, the entire global gross domestic product (GDP) was an estimated $105 trillion, up just 5% from 2022.

Nvidia's market cap, therefore, is equivalent to about 2% of the global GDP. If it maintained that proportion over the long haul, it would be worth $200 trillion when the world economy had grown to an almost incomprehensibly large $10 quadrillion. That may not happen in our lifetime -- global GDP has grown by between 2% and 5% a year since 1980 in most years, except during the 2008-2009 recession and at the onset of the pandemic in 2020.

Assuming the global economy grows at an optimistic 5% a year, it would take more than nine decades for it to grow to $10 quadrillion. We can't know if Nvidia will even be around then. However, going by the company's prospects and the multiple markets that it serves with its graphics processing units (GPUs), there is a good chance it could turn out to be a solid long-term bet -- even if it's unlikely to turn a $10,000 investment into a million-dollar position again in our lifetimes.

But if you have that much in investible cash after covering your bills, paying off any high-interest debt you have, and building up an emergency fund, putting $10,000 into Nvidia as a part of a diversified portfolio could indeed help you get closer to your financial goals.

Multiple catalysts make Nvidia a solid long-term buy

As the following chart shows, Nvidia's growth has taken off from the end of 2022.

Could Nvidia Stock Help You Become a Millionaire? | The Motley Fool (2)

NVDA Revenue (Quarterly) data by YCharts.

The company's data center business has played a central role in this growth. It delivered a record $47.5 billion in revenue in its recently concluded fiscal 2024, which was a massive 217% increase. The data center business produced 79% of Nvidia's total revenue of $60.1 billion.

This business segment is moving the needle in a big way for Nvidia as customers are lining up to buy its most powerful GPUs for artificial intelligence (AI) training and inference. From Alphabet to Amazon to Meta Platforms and many more, Nvidia has an illustrious list of customers for its flagship H100 processor. More importantly, it will launch its next-generation H200 AI GPU soon, and demand for this chip is already high.

However, this is not the only GPU opportunity Nvidia is set to benefit from. The company's gaming business has also gained solid momentum and could generate billions of dollars in annual revenue for the company in the future.

It is worth noting that Nvidia remains the dominant player in the market for both AI and PC GPUs. While its share of the discrete PC GPU market reportedly stands at more than 80%, Wells Fargo recently estimated that it controls a whopping 98% of the AI GPU market. Precedence Research forecasts that the global GPU market's revenue will grow from $42 billion in 2022 to $773 billion in 2032, an annualized growth rate of almost 34%. Given Nvidia's market share now, its outstanding pace of growth looks sustainable.

More importantly, Nvidia is looking to increase its reach beyond these two markets. For instance, it is reportedly looking to get into the custom AI chip market, a lucrative growth opportunity. On the other hand, Nvidia's professional visualization business is now growing at an impressive pace as well.

The company generated $463 million in revenue in the professional visualization segment last quarter, a jump of 105% from the prior-year period. This segment includes the company's Omniverse digital twin platform and graphics cards used in workstation PCs. For the full fiscal year, its professional visualization revenue was just $1.6 billion, so it is still a small segment for the company, but the opportunity here is huge, and the company has already started capitalizing on it.

As such, there are multiple reasons this semiconductor giant could continue to grow at a healthy pace in the long run. This is also evident from the company's price/earnings-to-growth (PEG) ratio, which stands at just 0.12.

Could Nvidia Stock Help You Become a Millionaire? | The Motley Fool (3)

NVDA PEG Ratio data by YCharts.

The PEG ratio is a forward-looking metric that's calculated by dividing a company's price-to-earnings ratio by the annual earnings growth it is expected to deliver, usually over five years. A result of less than 1 indicates that a stock is undervalued when compared to the growth it could deliver.

So, investors looking to add a potential long-term winner to their portfolios should consider buying Nvidia stock right now, as it could help them in their quest to become millionaires.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.

Could Nvidia Stock Help You Become a Millionaire? | The Motley Fool (2024)

FAQs

Could Nvidia stock make you a millionaire? ›

For instance, an investment worth $10,000 in shares of Nvidia (NASDAQ: NVDA) a decade ago is now worth $1.9 million. That translates into a whopping annual return of almost 70% over the past 10 years.

Did Motley Fool recommend Nvidia? ›

The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2025 $45 calls on Intel and short May 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.

Where will Nvidia stock be in 5 years? ›

Multiplying the projected earnings with Nvidia's five-year average forward earnings multiple of 39 suggests that its stock price could hit $2,266 per share (barring any stock splits or other events) after five years. That would translate into a jump of 162% from current levels.

Will Nvidia stock reach $10,000? ›

To reach $10,000 by the end of 2025, Nvidia must generate a compound annual growth rate of nearly 300%. It seems outlandish and probably is, but if the company continues to deliver AI-fueled growth in 2024 and 2025, I'm not sure investors can count it out.

What if you invested $1 000 in Nvidia 10 years ago? ›

If you had invested $1,000 in Nvidia 10 years ago, your investment would have soared by about 22,340% and be worth around $148,226 as of Feb.

Does Warren Buffett invest in Nvidia? ›

Key Takeaways. Warren Buffett's Berkshire Hathaway as of the end of 2023 had no stake in Nvidia, a company at the center of rising investor enthusiasm about growth opportunities related to artificial intelligence.

What did Jim Cramer say about Nvidia? ›

“I just hope we clear out the short-term traders for Nvidia and end up with a more reliable, steady, believing shareholder base.” Cybersecurity outfit Palo Alto Networks reports on Monday, and Cramer said he thinks the company will have good things to say, even though it lowered guidance after its last quarter.

Is it wise to invest in Nvidia? ›

With a breakout past a handle buy point Wednesday, Nvidia stock is a buy right now. The stock has retaken its 50-day moving average also, which would have been an entry for aggressive traders. The relative strength line is near new highs, which is a good sign for the breakout.

What will Nvidia stock be worth in 2026? ›

Highlights and Key Points: Nvidia Stock Forecast 2024-2030

Capital expects a price range of $996 to $1 850. Long-term forecast for 2026-2030: projected steady growth, with expectations of reaching $2,088 by the end of 2026 and continuing to climb in subsequent years​​.

Who is Nvidia's biggest rival? ›

Nvidia has identified Chinese tech company Huawei as one of its top competitors in various categories such as chip production, AI and cloud services.

How high will Nvidia stock go? ›

Average Price Target

Based on 42 Wall Street analysts offering 12 month price targets for Nvidia in the last 3 months. The average price target is $1,035.84 with a high forecast of $1,400.00 and a low forecast of $620.00. The average price target represents a 12.01% change from the last price of $924.79.

How much will Nvidia be worth in 2030? ›

Long-Term NVIDIA Stock Price Predictions
YearPredictionChange
2027$ 5,523.42485.44%
2028$ 9,954.89955.15%
2029$ 17,9421,801.70%
2030$ 32,3363,327.44%
2 more rows

Could Nvidia make you a millionaire? ›

Nvidia (NASDAQ: NVDA) is a prime example of what a successful buy-and-hold investment can deliver over the long run. An investor who put $10,000 into Nvidia stock a decade ago and held on would be sitting on a position worth more than $1.8 million right now and more than $1.9 million with dividends reinvested.

What price will Nvidia stock be in 10 years? ›

Assuming Nvidia is still trading at the same forward P/E, its stock price could reach $3,360 by the end of 2030, or 328% above the current share price. That would put its market cap at over $8 trillion.

How much is Nvidia worth in 2025? ›

Based on Nvidia's strong forecast start for fiscal 2025, we model DC revenue rising 113% to $101 billion over the year.

How high can Nvidia stock go? ›

Assuming Nvidia is still trading at the same forward P/E, its stock price could reach $3,360 by the end of 2030, or 328% above the current share price. That would put its market cap at over $8 trillion.

Can Nvidia stock reach $1,000? ›

Truist Nvidia price target: $1,177 noted the analyst William Stein, who sees “stronger demand in 2024 and 2025,” reported IBD IBD -0.1% . HSBC HBA 0.0% Nvidia price target: $1,050, and. Bank of America Nvidia price target: $1,100, IBD wrote.

Is it worth investing in Nvidia? ›

With a breakout past a handle buy point Wednesday, Nvidia stock is a buy right now. The stock has retaken its 50-day moving average also, which would have been an entry for aggressive traders. The relative strength line is near new highs, which is a good sign for the breakout.

Can stock options make you a millionaire? ›

The answer, in short, is yes. Investing in stocks has the potential to make you a millionaire, but it's not guaranteed. Successful investing requires knowledge, research, and patience. It's important to understand that investing comes with risks.

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