Stock market

At over 17,500% in 10 years, I don’t think Nvidia stock is done yet

Many investors consider Nvidia (NASDAQ:NVDA) stock is one of the most popular portfolio choices right now. However, others are concerned about the company’s valuation. My opinion is that even after gaining more than 17,500% in 10 years, it could go up a lot in value from here.

Why I love Nvidia

In my research for this article, I came across an interview with Nvidia CEO Jensen Huang on CNBC. In the interview, he mentioned how he attributes his success with Nvidia in part to the fact that he keeps the company agile. This means that the firm is ready to adapt to changing market conditions, including taking advantage of opportunities and avoiding risks.

Artificial intelligence wasn’t Nvidia’s starting point. He had extensive experience in gaming, high-end visual representation, and other forms of high-computational power. This later translated well into AI operations. When the next technology shift happens, Nvidia must be ready for it and expand its operations accordingly.

Is the diagnosis really bothersome?

Investors who are concerned about Nvidia’s value have a reason to be. Traditional value investors look for companies that are trading below the company’s intrinsic value based on forecasted cash flows. However, in the technology industry, it is very common for companies to trade for much longer than this estimate, and in the case of large technologies, for decades.

Therefore, I don’t think it’s really risky to invest in technology companies like Nvidia that are highly regarded by traditional measures. The real question is, what does the investing public consider a fair price in the long run? And then, even more important, how likely the firm is to continue growing and what the business strategy looks like.

Leading analysts expect Nvidia’s future growth to be quite extraordinary. Additionally, because I don’t think AI is a bubble, like the Internet was in the 1990s, I don’t think the price is going to go down. Also, as I mentioned above, Nvidia isn’t just an AI company. It has cleverly positioned itself as a provider of advanced computational power in almost all industries that require more advanced technology tasks.

Where are the real dangers here?

Some smart AI companies today are finding little inefficiencies in Nvidia’s grand strategy. There is some risk that smaller companies could capture certain market segments that Nvidia would like to dominate. Nvidia may be the largest provider of computational power in the world. However, it may find that it loses the battle to be the most efficient for single tasks.

Additionally, I am preparing for some periods of volatility in share prices. For example, in 2025, analysts expect the firm’s growth to slow. Since the valuation is already too high, investors may irrationally sell more stocks out of fear. This means I need the right mindset to sustain this business through market reactions. I will focus on the long-term quality and growth involved in the business.

Although I am not a shareholder yet, I think I will be soon!

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