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Nvidia just became the first company to reach a $4 trillion market cap.
It is offering advanced computing solutions for every sector of the economy.
Analysts project Nvidia to grow earnings per share at high rates for several more years.
It's difficult to find any companies that have benefited from the growth of artificial intelligence (AI) like Nvidia (NASDAQ: NVDA). The stock has been a rocket ship for shareholders, soaring 34,200% over the last 10 years. Even investors who thought they were late in 2022 would be up over 1,010% on their investment.
Nvidia just became the first company to hit a $4 trillion market cap (stock price multiplied by shares outstanding), but this innovative semiconductor business still offers excellent return prospects for new investors. Here are 10 reasons you should consider adding some shares to your portfolio today.
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Image source: Nvidia.
Artificial intelligence could add trillions of value to the economy in the coming years. Every major cloud service provider, or hyperscaler, uses Nvidia's graphics processing units (GPUs) in their servers. Nvidia has been a leader in GPUs for 20 years, putting the company in a prime position to benefit from this opportunity.
Nvidia's revenue from selling chips and other products to data centers made up nearly 90% of its business last quarter, and it's still growing at robust rates. It reported $39 billion in data center sales last quarter, up 73% over the year-ago quarter.
The stock is worth $4 trillion for a good reason. Nvidia's dominance in AI chips allows it to earn very high margins. Nvidia made $77 billion in net income on $148 billion of revenue over the last year, and its net income has increased 892% over the last three years.
Data by YCharts
Nvidia is not just selling a chip. It offers computing platforms tailored for specific markets. Nvidia Drive is the company's autonomous vehicle training platform, which is on pace to generate over $2 billion in revenue this year. It also offers advanced computing solutions for healthcare, manufacturing, robotics, and more. It is enabling AI adoption across the global economy.
Nvidia's CUDA (compute unified device architecture) was introduced in 2006. This allowed developers to program Nvidia's GPUs to work across a number of complex computing tasks beyond playing video games and other graphics-intensive applications. There were over 5.9 million developers using Nvidia's CUDA last year, up from 4.7 million the year before, pointing to its growing AI leadership around the world.
Nvidia is off to a strong start in 2025 thanks to growing demand for its new Blackwell computing system, designed for the most advanced AI workloads. Total revenue grew 69% year over year in fiscal 2026's first quarter, and current Wall Street estimates have its revenue rising 53% this year to reach $200 billion.
Annual data center spending globally is expected to reach $1 trillion by 2029, according to Dell'Oro Group. As the leader in not just chips, but also networking hardware, Nvidia stands to capture a large portion of that spending.
Investors can see Nvidia going after a huge opportunity by looking at the rate of increase in its research and development (R&D) expense. Nvidia's R&D has doubled over the last three years to $14 billion on a trailing-12-month basis. R&D includes the spending on engineering and new products. The recent acceleration reflects the investment in Blackwell chips that are driving revenue growth right now. Nvidia has announced the next-generation Vera Rubin chips for 2026, with Rubin Ultra planned for 2027.
Data by YCharts.
In May, the U.S. Department of Energy announced a new contract with Dell Technologies to develop a new flagship supercomputer for the National Energy Research Scientific Computing Center. The supercomputer will be powered by Nvidia's next-generation Vera Rubin platform. It will be used for molecular dynamics, high-energy physics, and AI training and inferencing.
CEO Jensen Huang has guided Nvidia from humble beginnings. For many years, Nvidia's GPUs were used to run graphics software and video games, but these chips are now running the most powerful computers in the world. Nvidia's market cap has grown from $4 billion in 2000 to $4.15 trillion in 2025.
The stock was trading around 50 times earnings in 2000, and it's trading at the same valuation today. With analysts projecting the company's earnings to grow 29% in the next few years, investors can still buy shares and see great returns on their investment.
Before you buy stock in Nvidia, consider this:
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John Ballard has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
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