From Nasdaq:

In 2023, Nvidia had an exceptional year driven by increased demand for AI chips for data centers. Sales soared from $3.6 billion to $14.5 billion over nine months. Despite this, it only made about half that in revenue the year before, indicating its high valuation. However, experts are hopeful for its future in the rapidly expanding AI market.

Nvidia’s revenue pales in comparison to other trillion-dollar companies like Microsoft. However, it’s leading in the AI and general-purpose computing infrastructure market. The market value for data centers alone is currently around $1 trillion, and that number is expected to skyrocket, especially as AI becomes more integrated into businesses.

Wall Street analysts expect Nvidia to see over $90 billion in revenue by 2025. With numerous factors like the booming AI market and the potential for growth within PC sales, the stock is promising. It’s also currently the world’s most valuable semiconductor business, generating a substantial amount of cash.

Nvidia’s market cap may seem expensive at first glance, but its profit potential is significant. The company is excelling in the development and sale of hardware and software, outperforming the likes of AMD and Intel in operating margin and free cash flow generation. While it may seem wealthy, its value may not be as unreasonable as it appears.

Investors should keep in mind that the accelerated computing market is cyclical, and a downturn is inevitable at some point. Despite this, Nvidia’s position as a tech giant and software platform makes it a sound investment for the long-term. While caution is needed due to potential future downturns, the stock is a top choice for 2024.

Before investing in Nvidia stock, investors should consider other potential high-growth stocks. The Motley Fool Stock Advisor analyst team believes that there are 10 stocks that could provide significant returns in the coming years. Nvidia did not make the cut, but this service offers guidance on building a portfolio and provides frequent updates and stock picks.



Read more: Is Nvidia Really an Expensive Stock in 2024?