The fear of missing out (FOMO) is a real phenomenon that applies to many walks of life, including investing. After a stock has experienced a huge run, many investors hesitate to buy, fearing they've missed out. This is the case for many when it comes to Nvidia (NVDA +0.54%).
Since the start of 2023, Nvidia's stock is up over 1,000%, turning every $1,000 invested then into well over $11,000 today. Considering how much the stock has surged, it's natural for investors to think they've missed the train. However, there's one key reason why that's likely not the case.
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All eyes were on Nvidia's latest earnings report because the company plays a pivotal role in the artificial intelligence (AI) ecosystem as the go-to provider of graphics processing units (GPUs) that power data centers. These GPUs are to data centers what electricity is to homes, and data centers make training and scaling AI possible.
The reason it's not too late to buy Nvidia is that we're seemingly on the earlier end of huge AI infrastructure spending from many of the world's largest tech companies. Companies like Apple, Microsoft, Amazon, and Meta all plan to increase their capital expenditures to increase their AI infrastructure and capabilities. Nvidia said it expects a $3 trillion to $4 trillion AI infrastructure opportunity over the next five years.
This won't be $3 trillion to $4 trillion flowing directly into Nvidia's bank account, but as the leading AI infrastructure provider, it stands to gain a lot if this plays out as the company expects. I wouldn't expect the stock to continue at its current pace over the past couple of years, but its long-term growth prospects remain strong. Just prepared for the inevitable volatility along the way.
