Nvidia has emerged as a major player in the rapidly growing field of artificial intelligence (AI). The company’s advanced graphics processing units (GPUs) have been in high demand since the launch of ChatGPT, with supply struggling to keep up. Nvidia dominates the data center GPU market, a technology it has been perfecting for decades.
Its innovations, such as the CUDA programming language, allow developers to create high-performance applications that run directly on Nvidia’s GPUs. While early investors have already seen substantial returns, new investors are wondering if the stock is still a wise investment. Comparing Nvidia’s current position to Apple’s in 2012 offers some interesting insights.
In 2012, Apple was the most valuable company in the world, driven by the success of the iPhone and iPad.
Nvidia’s pivotal AI strategy
Despite its size, Apple continued to deliver significant returns to investors, with its market cap increasing sixfold and its stock price growing nearly 1,000% since then.
Nvidia might be at a similar crossroads today. Despite skepticism about future growth in the semiconductor industry, Nvidia’s stock appears undervalued given its potential in AI. Analysts expect Nvidia’s revenue to grow by 53% this year and 24% next year, indicating a faster growth rate than many other stocks.
While Nvidia might not achieve the same tenfold increase as Apple did from 2012, the company’s role in AI technology suggests significant growth potential. Investors might be underestimating Nvidia’s future, just as they did with Apple’s mobile technology impact years ago. If this holds true, Nvidia could be a major winner in the coming decade.
