Growth stocks have driven the economy’s profits S&P500 in recent times, putting it into a bull market early in the year and continuing to climb to new all-time highs. Many of these players are technology companies active in one of today’s hottest growth areas: artificial intelligence (AI). If AI delivers on its promise to revolutionize business and everyday life, these companies and those who buy their stocks today could make big profits in a few years.
And this is why investors have piled into AI stocks over the past year, hoping to get in on this technology early and maximize their profits. One particular stock has emerged as a leader in this space, dominating the AI chip market, driving triple-digit revenue growth in the billions of dollars, and driving a triple-digit share price increase this year. The good news is that it is not too late to get to know this AI winner of today and tomorrow. Meet the supercharged growth stocks that could make you a millionaire.
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But first it’s important to note that when I say “make you a millionaire,” I mean in the context of a diversified portfolio over a period of years. It’s too risky to bet everything on one particular stock and just hope that your wealth grows, no matter how solid the company is. So you want to invest in several quality stocks, add this specific growth stock to your portfolio, and hold onto these players for at least five to ten years.
Now let’s look at this millionaire stock, a stock that is up 2,600% in five years and is on track for a gain of about 190% this year. And because of this achievement, it has most likely already made a number of millionaires. I’m talking about Nvidia (NASDAQ: NVDA).
The AI giant has been making headlines quarter after quarter with its massive revenue growth and profitability. For example, in the most recent quarter, sales reached a record of over $35 billion, with a gross margin of around 70%. And even in the coming quarters, as Nvidia launches a major new product – the Blackwell architecture – the company expects to be able to keep margins in the low 70%s. This will be a huge achievement – and a testament to Nvidia’s financial strength.
What sets Nvidia apart in this competitive market? The company entered the AI scene early with its graphics processing units (GPUs), powerful chips that process many tasks simultaneously. This makes them perfect for AI, including crucial tasks such as training and inferring models. By the time rivals launched their powerful AI chips, Nvidia was already in the lead – and thanks to the company’s focus on continuous innovation, it is likely to maintain this position.
Nvidia promises to update its GPUs annually, making it difficult for the competition to get ahead. And today, Nvidia is on track with what may be its biggest launch yet. As mentioned, it is releasing the Blackwell architecture, a groundbreaking platform with customizable components – from chips to networking options. (While Nvidia is referred to as a chip designer, it’s important to note that the company offers a wide range of related products and services.) Demand for Blackwell has been “mind-boggling,” the company said on its latest earnings call, and it’s racing. to fulfill orders from customers, including the world’s largest technology companies.
And these customers are willing to wait and pay more for the Nvidia platform thanks to its top performance. They want to win in the AI market and know they have a better chance of doing so if they use the most advanced AI platform.
Today, Nvidia stock trades for 49 times forward earnings estimates, and given everything I’ve mentioned and the fact that we’re in the early days of AI growth, this valuation seems reasonable. The AI market is expected to grow from $200 billion today to $1 trillion by the end of this decade – and Nvidia is well positioned to benefit.
And as an investor, you could benefit too – and potentially set yourself on the path to millions – by buying this top AI stock and holding it for the long term.
Consider the following before buying shares in Nvidia:
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Adria Cimino has no positions in the stocks mentioned. The Motley Fool holds positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
Meet the Supercharged Growth Stocks That Could Make You a Millionaire, originally published by The Motley Fool
