Growth stocks have powered the gains of the S&P 500 in recent times, helping it roar into a bull market early in the year and continue climbing to new records. Many of these players are technology companies present in one of today’s hottest growth areas: artificial intelligence (AI). If AI meets its promise of revolutionizing business and daily life, these companies and those buying their shares today could win big a few years from now.
And this is why investors have piled into AI stocks over the past year or so, hoping to get in early on this technology and maximize their gains. One particular stock has emerged as a leader in the field — dominating the AI chip market, bringing in triple-digit revenue growth into the billions of dollars, and delivering a triple-digit stock price increase this year. The great news is it’s not too late to get in on this AI winner of today and tomorrow. Meet the supercharged growth stock that could make you a millionaire.
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Owning a diversified portfolio over time
First, though, 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 hope for it, alone, to grow your wealth — no matter how solid the company. So, you’ll want to invest in several quality stocks, add this particular growth stock to your portfolio, and hold on to these players for at least five to 10 years.
Now let’s take a look at this millionaire-maker stock, one that’s climbed 2,600% over five years and is heading for a gain of about 190% this year. And because of this performance, it’s most likely already made some millionaires. I’m talking about Nvidia (NVDA -1.81%).
The AI giant has made headlines quarter after quarter with its enormous revenue growth and profitability. For example, in the most recent quarter, revenue reached a record of more than $35 billion, and this is with a gross margin in the mid-70% range. And even in the coming quarters, as Nvidia launches a major new product — its Blackwell architecture — it expects to maintain margins in the low-70% range. This will be a huge accomplishment — and proof of Nvidia’s financial strength.
Why does Nvidia stand out in this competitive market? The company arrived on 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 jobs like the training and inferencing of models. By the time rivals launched their high-performance AI chips, Nvidia already was in the lead — and thanks to the company’s focus on ongoing innovation, it’s likely to maintain this position.
Nvidia’s innovation promise
Nvidia promises to update its GPUs on an annual basis, 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’s releasing the Blackwell architecture, a game-changing platform with customizable components — from chips to networking options. (Though Nvidia is referred to as a chip designer, it’s important to note that the company offers a wide variety of related products and services.) Demand for Blackwell has been “staggering,” the company said during its latest earnings call, and it’s racing to fill orders from customers including the world’s biggest tech companies.
And these customers are willing to wait and pay more for Nvidia’s 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 are using the most advanced AI platform.
Today, Nvidia stock trades for 49 times forward earnings estimates, and considering all I’ve mentioned and the fact that we’re in the early days of AI growth, this valuation looks reasonable. The AI market is forecast to expand from $200 billion today to $1 trillion by the end of the decade — and Nvidia is well positioned to benefit.
And as an investor, you also could benefit — and potentially set off on the path to millions — by buying this top AI stock and holding on for the long term.
Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
