Nvidia (NVDA +1.30%) has been one of the best investments ever on the stock market; it's up nearly 460,500% since it went public, turning a $1,000 investment into $4.61 million.
It's unlikely there are retail investors who purchased at IPO and are still holding on today, but even if you'd been prescient enough to invest 10 years ago, a $1,000 investment would be worth $210,000 today.
Nvidia stock may not deliver the same level of dazzling returns today, but new investors can still enjoy being part of Nvidia's growth story. And since Nvidia stock is trading almost 9% off its all-time highs, now could be a great time to buy shares.
Image source: Nvidia.
Nvidia products and software help form the foundation of AI
Nvidia stock did well for investors even before it became the defining stock of the artificial intelligence (AI) revolution, but it was somewhat lesser known prior to 2022, when Nvidia's main business was chips for gaming and cryptocurrency mining. Those same graphics-processing units (GPUs) that were crucial for potent gaming features and to process the equations needed to attain Bitcoin and other cryptocurrencies have the necessary power to drive AI development, and they're the foundation of AI development today.
What makes Nvidia stand out as a great company, beyond its powerful hardware and software products, is the way that it has maintained a rate of innovation that protects its moat and keeps it at the top of the industry. It keeps coming out with improved platforms and better cost efficiency, the latter of which has allowed some competitors to break into some perceived white space where clients are looking for more affordable options.
But most importantly, Nvidia is much more than GPUs; it offers full platforms and systems that work together and have become indispensable to the world's AI giants. That also creates high barriers to entry for competitors, even if companies like Alphabet, Broadcom, and Amazon compete in certain parts of the process.
NASDAQ: NVDA
Key Data Points
Why buy Nvidia stock now?
After delivering staggering gains over a three-year period between 2023 and 2025, Nvidia stock has taken a breather this year. Investors seem mostly concerned about Nvidia's customers' ability to spend as much as they're planning to in the coming years. If spending slows down, so will Nvidia's revenue.
However, clients like Amazon and Meta Platforms have been clear about the need to keep investing and that the results are forthcoming. Nvidia CEO Jensen Huang also calmed investors when he recently said that he expects the combined sales of the company's two most recent semiconductor platforms, Blackwell and Rubin, to reach $1 trillion annually in 2027. For context, Nvidia reported trailing-12-month revenue of $216 billion.
As for valuation, Nvidia stock trades at only 17 times forward one-year earnings, which is an excellent entry point for new investors.
