From Nasdaq:

Nvidia had an incredible 2023, with the stock rising nearly 240%. Its GPUs saw a surge in demand from companies investing in AI, bringing the company back from declining GPU sales. However, Nvidia is cyclical, and revenue might not remain high indefinitely.

A $10,000 investment made in 2020 would have seen a rollercoaster return. At its highest in late 2021, it turned into $50,000, dropped to $20,000, and then soared again in 2023 to $82,000. Nvidia’s historical cyclicality means its impressive revenue might be short-lived.

It’s wise to prepare for the possibility that Nvidia’s stock is cyclical, although it’s expected that the AI market will become saturated. Also, consider that a long-term investment in Nvidia stock experienced a substantial return. Investors should take gains, considering the stock’s high valuation and cyclical nature.

Investments in Nvidia stock need to consider the company’s cyclical nature. If considering a new position, it might be wise to wait due to the high valuation. Should the market for Nvidia’s GPUs expand significantly, a smaller position might be a good strategy. Taking gains might be wise considering the stock’s high valuation.

The predicted future bust of Nvidia’s stock is unclear, but it’s prudent to prepare for one. It’s worth reconsidering before investing in Nvidia stock, as The Motley Fool Stock Advisor analyst team doesn’t believe it’s a top choice at the moment. They highlight ten other stocks with the potential for outstanding returns.

The Motley Fool disclaims that the author’s views do not reflect those of Nasdaq, Inc. They have positions in and recommend Nvidia. This means that the author is impartially advising against investment in Nvidia stock presently.



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