Why Nvidia is a Smart Long-Term Investment for Growth

Nvidia (NASDAQ: NVDA) has demonstrated itself as a strong long-term investment, with its stock increasing by 1,800% over the last five years. This surge can be attributed to the company’s leadership in one of the fastest-growing sectors today: artificial intelligence (AI). The AI market, currently valued at around $200 billion, is expected to exceed $1 trillion by the end of the decade.

Nvidia’s leading position in the market has started to yield significant benefits. The company has consistently reported double- and triple-digit earnings growth, and this trend continued in the most recent period. Nvidia achieved record revenue levels, reporting $39 billion for the quarter and $130 billion for the year. Additionally, the company is well-positioned for future growth, as it will reap the benefits of ongoing developments in AI infrastructure and further applications of technology to address real-world challenges.

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Considering these factors, it’s clear that Nvidia represents a strong investment opportunity. Potential investors might be wondering when is the best moment to enter this stock. You could take action immediately, or you might choose to wait until March 18, which may serve as a significant catalyst for the stock.

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Why Nvidia Deserves a Place in Your Portfolio

To understand why Nvidia could be a wise investment choice, we should consider the company’s impressive earnings history. This robust growth trend is expected to continue, fueled by Nvidia’s innovations in AI technology. Known for creating some of the fastest AI chips, or graphics processing units (GPUs), Nvidia also provides a wide array of related products and services. New and established AI customers can find nearly everything they need at Nvidia.

Innovation is key in maintaining Nvidia’s competitive edge in this rapidly evolving market. Recently, during an earnings call, Nvidia announced the successful launch of its new Blackwell architecture, which generated $11 billion in its first full quarter. Furthermore, the company remains committed to annual innovation, with plans to roll out Blackwell Ultra in the second half of the year, followed by the Rubin architecture.

This strategic positioning allows Nvidia to tap into ongoing AI infrastructure developments and future growth phases. Consequently, the stock stands out as a compelling buy for investors looking to capitalize on the AI transformation. Some may consider waiting a few weeks, however.

Upcoming Keynote on AI Developments

On March 18, Nvidia’s CEO Jensen Huang will deliver a keynote address at the company’s annual GTC AI conference, where further insights on the future of AI might be revealed.

“Come to GTC, and I’ll talk to you about Blackwell Ultra, Vera Rubin and then show you what we place after that,” Huang mentioned during a recent earnings call, hinting at potentially thrilling updates about the company.

The GTC conference will span five days, showcasing exhibits, panels, and even a new focus on quantum computing. Huang’s keynote is scheduled from 10 a.m. to noon PT on March 18.

Data shows that Nvidia’s stock has not consistently surged following its earnings reports, despite strong results. For instance, in the month after its last two earnings reports, the stock took a hit. If it stagnates or decreases in value over the coming days, a lower buy-in price could be available just before or during the GTC conference. However, it’s essential to remember that past patterns do not guarantee future results.

Long-term Focus Over Short-term Timing

So, what’s the optimal path forward? It’s wise to alleviate any pressure and recognize that short-term fluctuations won’t drastically affect your overall returns if you plan to hold a stock long-term. Nvidia’s impressive quadruble-digit growth over the past five years illustrates that minor changes in price over a few weeks are unlikely to significantly impact an investor’s outcomes at the end of the investment period.

In conclusion, the timing of purchasing Nvidia shares—whether now, shortly before Huang’s keynote, or even after the conference—might not greatly influence long-term success. Overall, Nvidia appears attractively priced at approximately 29 times forward earnings estimates, making this an ideal time for those with available capital to invest in this leading AI stock.

Seize This Opportunity Before It’s Too Late

Have you ever felt you’ve missed out on top-performing stocks? If so, here’s important information.

Our expert analysts rarely issue a “Double Down” stock recommendation for companies poised for significant growth. If you believe you’ve missed your chance, now might be the right moment to invest before prices increase. The figures indicate strong potential:

• Nvidia: If you invested $1,000 when we doubled down in 2009, you’d have $311,551!*
• Apple: If you invested $1,000 when we doubled down in 2008, you’d have $44,990!*
• Netflix: If you invested $1,000 when we doubled down in 2004, you’d have $519,375!*

Currently, we are issuing “Double Down” alerts for three exceptional companies, and this opportunity may not come again soon.

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*Stock Advisor returns as of February 28, 2025

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.