If you invested $1,000 in Nvidia (NASDAQ: NVDA) 10 years ago, it would be worth approximately $2.3 million today, reflecting a 23,000% return. Nvidia has become a leading supplier of graphics processing units (GPUs) essential for generative AI, positioning the company for significant growth as AI technology evolves. In the first quarter, Nvidia reported $26 billion in sales, with $329 million coming from automotive and robotics sectors.
Despite the impressive growth, there are potential risks. Similar to the dot-com bubble experienced by Cisco Systems in the early 2000s, Nvidia could face a volatile market if generative AI does not meet high expectations. Currently, Nvidia has a market capitalization of $2.7 trillion and a trailing price-to-earnings (P/E) ratio of 64, suggesting that the market may be pricing in some of these risks.
Though Nvidia shows promise due to its diverse AI applications, investors are advised to proceed with caution, given past tech market fluctuations. Potential investors should also note that Nvidia was not included in the Motley Fool’s latest list of top stocks for investment.
