1 Incredible Reason to Buy Nvidia Stock (NVDA) in November — or Sooner

Nvidia’s stock has grown by 25,226% over the past decade — with more room to grow.

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This article first appeared on our U.S. website.

Here’s what’s so incredible about Nvidia (NASDAQ: NVDA) stock: Over the past decade, it has averaged annual gains of 74% — enough to turn a single US$10,000 investment into one worth more than $2.5 million! Over the past three years, the stock has averaged gains of 144% annually. And it’s up more than 35% year to date as I type this. The incredible thing is that despite that torrid growth, the stock doesn’t seem outrageously valued, at all.

Before you jump to buy shares of Nvidia, though, be sure you’ve researched it enough to understand it well. Originally known for gaming chips, Nvidia is now not only a leader in graphics processing units (GPUs) for games but also in chips for data centres. And data centres are booming, as much of our artificial intelligence (AI) activity runs through them. In its second quarter, Nvidia’s data centre revenue was up 56% year over year to US$41.1 billion, making up more than 88% of total revenue. 

Nvidia’s CEO, Jensen Huang, has estimated that spending on AI infrastructure (think: data centres and the chips they require) will be between US$3 trillion and US$4 trillion by the end of the decade — up from around US$600 billion in 2025. That certainly bodes well for Nvidia. (Huang has also noted that for every US$50 billion spent on AI infrastructure, Nvidia gets about US$35 billion, or 70%. Wow.)

Also, many people don’t realize it, but Nvidia is providing not just chips to enable AI operations, but also software and other necessities. That has served the company well, but some see its dominance threatened, as some big tech companies work on developing their own chips and software in-house, as Meta Platforms (NASDAQ:META) is doing.

Meanwhile, the current geopolitical environment remains…uncertain, with Nvidia’s business with China potentially threatened. And the company does face some competition, from the likes of Advanced Micro Devices (NASDAQ:AMD) and Broadcom (NASDAQ:AVGO), among others.

Still, at recent levels, I think it’s well worth thinking about adding Nvidia to your long-term portfolio — perhaps now or in November. Even if its growth rate slows, due to competition and/or geopolitical interference with its progress, it’s likely to keep growing — via both data centre offerings and other products.

Fool contributor Selena Maranjian has positions in Advanced Micro Devices, Broadcom, Meta Platforms, and Nvidia. The Motley Fool recommends Advanced Micro Devices, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.

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