Meet the Monster Stock that Continues to Crush the Market

Key Points

• Nvidia's stock is up 866% over the past three years.

• The company's unrivaled semiconductor business, superb leadership, and continued investment in new tech keep it a step ahead of rivals.

• Even with its massive gains, there's still likely room for Nvidia stock to run.

• 10 stocks we like better than Nvidia ›

It seems like every investor already knows about semiconductor company Nvidia (NASDAQ: NVDA) these days, especially given the fact that this artificial intelligence (AI) stock is up 866% over the past three years. But Nvidia has been an important tech stock for many years, long before AI became a big trend, as the company built a strong business selling GPUs for gaming.

In fact, Nvidia's stock has outpaced the S&P 500 index in eight of the past 10 years. But can the company continue to crush the market? Here are five reasons why I think it can.

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Image source: Getty Images.

1. Its semiconductor designs are unrivaled

Many tech companies, including Meta, Apple, Microsoft, Amazon, and others, are building out their AI software systems, investing in artificial intelligence data centers and infrastructure, and collectively spending hundreds of billions of dollars to compete with each other.

But Nvidia doesn't have this same pressure to keep up because it's already the far-and-away leader in AI semiconductors with an estimated 70% to 95% of the market. Nvidia doesn't actually make the processors it designs; it hires Taiwan Semiconductor Manufacturing to do that, and Nvidia's latest AI chip designs, like its new Blackwell Ultra and Vera Rubin, should keep going for many more years.

2. Sales and earnings are through the roof

Nvidia's sales rose 114% to $130.5 billion in fiscal 2025, and earnings per share spiked 147% to $2.94. For the second quarter of fiscal 2026, management says revenue will be about $45 billion, which would be more than double sales from the year-ago quarter.

The company's ability to capitalize on all of its AI semiconductor demand and become massively profitable has been one of Nvidia's biggest advantages. Some AI companies are popular with investors right now, and their revenue may even be rising, but profits are still a long way off for some. This makes Nvidia a standout investment in the AI world right now.

3. Management is on point

Some companies are plagued by problems in their C-suite, which can cause the company to lose focus on long-term goals or lack the stability to implement good ideas. For example, the AI data analytics company BigBear.ai has been through three CEOs in four years. That's hardly a recipe for success.

Meanwhile, Nvidia has been run by one of its co-founders, Jensen Huang, for more than 30 years. Huang's stable leadership and long-term thinking have helped his company spot trends before they've fully emerged, like leaning into designing GPUs for gaming and then shifting focus to AI.

4. The AI data center market is still expanding

It's unrealistic to think that large technology companies will always need more AI processors for their data centers, but it's also premature to assume that they don't need more now. Meta, Microsoft, and Amazon are currently spending hundreds of billions of dollars to build new data centers and upgrade existing ones. These investments are driving huge semiconductor sales for Nvidia, and it could be many more years before that slows down.

Nvidia's Huang estimates tech companies will spend about $2 trillion on data center infrastructure over the next few years. And considering that this is still in the early innings of AI, there could be more opportunities for Nvidia's processors down the line that tech companies haven't even thought of yet.

5. Nvidia continues to invest in its future

Investors need only look to Intel, which missed the tech shift to mobile and is largely missing out on AI, for a quick lesson on the need to continually innovate. Thankfully, Nvidia appears to be doing this well, too.

The company spent nearly $13 billion on research and development in fiscal 2025 -- about 10% of its revenue -- and has been at the forefront of developing new processors and software for emerging trends, including autonomous vehicles and robotics. There are no guarantees Nvidia will successfully catch every trend, but its past and current success prove Nvidia has what it takes to spot new ones.

While there are many good AI stocks to buy right now, this list shows why Nvidia's success isn't just a flash in the pan and why the tech behemoth just might be able to continue crushing the market for years to come.

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Chris Neiger has positions in Apple. The Motley Fool has positions in and recommends Amazon, Apple, Intel, Meta Platforms, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft, short August 2025 $24 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.