Nvidia Stock Rises Over 900% Since 2023 – Here’s Why It Can Still Be an Excellent Investment
The stock price of Nvidia, NASDAQ: NVDA has gained a staggering 906% since the beginning of 2023, hitting the highest point yet. This mind-boggling gain might scare away some investors; however, there are many good reasons to believe that Nvidia has more significant gains ahead.
A common investor mindset, known as “price anchoring,” can prevent action. This occurs when investors become fixated on a stock’s past price, viewing its current valuation as too high. Such thinking is understandable, but it has led many, including myself, to miss significant opportunities during Nvidia’s rise. However, Nvidia’s valuation, especially compared to its peers, might not be as steep as it seems.
Even if you missed part of its rally, there’s still room for growth ahead.
Nvidia’s meteoric success is intricately linked with the explosive growth of artificial intelligence (AI). The company is now a bellwether for the AI revolution, as leading industry players have made Nvidia’s GPUs the heart of their computing architecture. These are highly efficient units at processing lots of calculations at once, making them ideal for the training of highly complex AI models. Clusters of tens of thousands of these Nvidia GPUs now make up commonplace servers used by AI hyperscalers.
The demand for AI infrastructure is far from cooling. Major cloud computing providers have announced plans to increase capital expenditures in 2025, mirroring the sentiment expressed by AI-heavy companies like Meta Platforms in their Q3 earnings reports. Furthermore, Taiwan Semiconductor Manufacturing, Nvidia’s chip supplier, predicts its revenue from AI-related chips will double in 2025, signaling continued growth for Nvidia.
Analyst estimates also see a rosy future for the company. Wall Street projects the fiscal year 2026 ending January 2026, when Nvidia is expected to produce $196 billion in revenues. This will be an amazing 52% jump from the estimated end of FY 2025. Growth this extreme in such a massive company as Nvidia makes its long-term potential strong.
With Nvidia’s superlative growth trajectory, traditional metrics like trailing earnings may not throw much light on its valuation. Going forward, the calculation will not be wrong.
Currently, at prices prevailing today, in case Nvidia manages to meet the analysts’ FY 2026 target, it would trade at 33 times projected earnings. In contrast, industry leaders Apple and Microsoft are expected to trade at 27 and 30 times FY 2026 earnings, respectively.
Based on Nvidia’s growth rates, it is unlikely that the stock will settle at such low levels of valuation. Therefore, continuous strong performance would be coupled with further price increases, delivering market-beating returns to investors.
While the performance of Nvidia during the recent period has been outstanding, the company looks well set for another impressive year in 2025. Its prospects may not be as explosive as in 2023 or 2024; still, they make it an attractive buy now.
Before diving into Nvidia stock, consider this: the Motley Fool’s Stock Advisor team recently revealed their top 10 stocks to buy now—and Nvidia didn’t make the list. However, their picks often deliver staggering returns. For example, an investor who followed their 2005 Nvidia recommendation with $1,000 would now have $874,051!
This goes to show that early, well-informed investment decisions can lead to incredible outcomes. Whether or not Nvidia fits your portfolio, staying informed and looking ahead is an essential step in building wealth.
*Disclosure: Randi Zuckerberg, a former director of Facebook and sister of Meta CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Contributors Keithen Drury and The Motley Fool hold positions in Nvidia, Taiwan Semiconductor Manufacturing, and other companies mentioned. Always consult your financial advisor before making investment decisions.*
