Could Nvidia Stock Help You Retire a Millionaire?

It can be fun to watch some stocks skyrocket, and it’s tempting to want to own one before that parabolic move occurs. However, investing for retirement doesn’t mean splurging on a big purchase. In fact, this can lead to anxiety and worry about your own nest egg. Think about what it would have been like if all your savings were tied up in it Tesla The stock fell 65% in 2022.

But if you allocate a reasonable amount, continue to invest, and hold shares in a great company despite the inevitable ups and downs, it can lead to a comfortable retirement. It can even make you a millionaire. Here’s why Nvidia (NVDA -1.61%) shows investors why it’s a great business and one that could help you retire a millionaire.

Is it a parabolic stock or company?

Nvidia shares have risen more than 800% since the beginning of 2023. Sometimes such a move is driven by investors worried about missing out on the next big thing. It’s likely that some of these purchases came from those trying to trade momentum stocks. But this is more like gambling than investing. The underlying business should attract long-term investors to choose stocks.

What attracts long-term investors to Nvidia is, above all, the enormous growth potential for artificial intelligence (AI) use cases. But it’s more than just the potential that drove Nvidia stock higher – it was also the results. Sales have more than quadrupled in the last two years. Nvidia’s GPUs (graphics processing units) are considered the industry standard as dozens of technology companies work to develop and monetize generative AI models.

Due to skyrocketing sales and share price, $10,000 invested in Nvidia stock at the start of 2023 would now be worth nearly $92,000. This huge two-year return is unusual and something investors should not continue to expect. But buying and holding Nvidia stock for years could still realistically make you a millionaire.

A world full of customers

Some investors question whether Nvidia can sustain its growth. There are reasons to believe this is the case, even if the pace of growth has slowed. Customers lined up to buy the first generation of GPU chips. While a lot of capital has already been invested in building the computing power needed for AI, Nvidia’s product launch plans and ancillary offerings are expected to further boost sales.

CEO Jensen Huang says demand for its Blackwell AI accelerator is “incredible.” This is likely to continue next year as production ramps up for the new architecture and the Rubin platform will succeed Blackwell in 2026. Nvidia also makes it easy – and uncomplicated – for customers. Its Compute Unified Device Architecture (CUDA) software platform helps developers extend applications on various types of GPU-accelerated embedded systems. A GPU computing ecosystem emerged. As more powerful GPUs are offered, customers using CUDA are locked into Nvidia.

Image source: Getty Images.

While spending by some big tech companies first in line for Nvidia chips may be slowing, there’s still a long line that should keep demand strong. In fact, sequential quarter-over-quarter revenue growth in Nvidia’s data center segment had declined for five quarterly periods since the quarter ended July 2023. However, this trend stabilized in the last quarter as data center revenue increased 17%. an increase of 100 basis points compared to the previous period.

Huang doesn’t just talk to CEOs about how Nvidia’s products can help customers. He travels the world meeting with world leaders as he announces the next phase of growth in “sovereign AI.”

Sovereign AI refers to a country’s investment in AI to drive innovation in many areas through high-performance computing and the use of domestic infrastructure, workforce, and data and business networks.

Buy-and-hold works best

There are many ways to continue driving Nvidia’s revenue, profits, and share price growth. However, that doesn’t mean there will be a direct path up. Achieving millionaire status through investments takes time. It also requires the conviction to hold or even add to stocks through the inevitable cycles.

The long-term future looks bright for Nvidia, and investors would probably do well to buy and hold the stock for the years and decades to come.