Nvidia, the chipmaker behind some of the world’s most powerful graphics processing units (GPUs), is poised for decades of growth as artificial intelligence (AI) technology continues to advance. The company’s business model sits at the center of the AI revolution, providing massive datasets and compute power necessary for complex models to operate.
Nvidia’s dominance in the field of GPUs is well-established, with a 90% market share for AI GPUs, according to some estimates. The company has invested heavily in developing its chips and software to support the growing AI industry, recognizing its potential before many competitors did.
One key factor driving Nvidia’s growth is its proprietary software, which has created a lock-in effect for customers. Scores of AI applications have been built around Nvidia’s hardware, and developers use its software to customize their chips to exact specifications. This gives Nvidia a significant competitive advantage, allowing it to maintain market share even if its hardware loses performance edge.
While the stock may trade at 25 times sales, which seems high, history has shown that Nvidia shares can increase in value by nearly 800% in just a few years when invested for the long term. The AI market is expected to grow from several hundred billion dollars to nearly $5 trillion over the next decade, and Nvidia’s software edge will likely give it a front-row seat to this growth.
However, investors should be patient, as high-multiple stocks like Nvidia can display extreme volatility from year to year. A decade-long investing horizon can help turn small amounts into millions of dollars through compound interest. As long as one maintains an understanding of the AI revolution’s multi-decade nature and Nvidia’s competitive advantage, buying this company is rarely a poor decision.
Source: https://www.fool.com/investing/2025/06/03/prediction-buying-nvidia-nvda-stock-life