Prediction: Nvidia Will Soar Over the Next 5 Years. Here's 1 Reason Why.

Source The Motley Fool

Nvidia (NASDAQ: NVDA) doesn't develop large language models. It doesn't create computer game franchises. It doesn't manufacture humanoid robots or autonomous vehicles, either. What Nvidia does is create the computing hardware technologies needed for all of these efforts.

Companies around the world are devoting capital to these projects. Nvidia has been, and will continue to be, a leading computing supplier for these technologies. With a product suite that offers hardware, software, and other expertise, it should stay at the forefront as businesses keep advancing and innovating.

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Yet that's not the real reason Nvidia stock can soar over the next five years.

Be greedy when others are fearful

A stock market correction can be a long-term investor's best friend. The Nasdaq Composite index has now entered correction territory since its closing high of 20,174 on Dec. 16. One result of the market downturn is a more than 20% drop in Nvidia shares so far this year.

Large companies are investing hundreds of billions of dollars in artificial intelligence (AI) infrastructure, a big reason Nvidia generated over $130 billion in revenue last year.

Management predicts the first quarter of Nvidia's fiscal 2026, which began in late January, will see 65% revenue growth over the year-ago period. That impressive increase is likely to slow as the year progresses and it faces tougher comparisons. But new catalysts could reaccelerate sales growth in the coming years.

Those include growing business outside of data centers for Nvidia. The company's gaming segment increased revenue by 9% last year. Professional visualization -- which includes a new personal AI supercomputer -- grew sales by 21%, while robotics and automotive revenue soared 55%.

Nvidia has many irons in the fire that could all meaningfully contribute over the next five years. With shares trading nearly 30% below early January highs, now is a good time to follow Warren Buffett's advice and buy this great stock while others are fearful.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

  • Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $282,016!*
  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $41,869!*
  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $482,720!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Continue »

*Stock Advisor returns as of March 10, 2025

Howard Smith has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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