The best way to generate wealth is to invest while keeping the years and decades ahead in mind. Companies that are successful have likely spent years innovating and developing.
That describes Nvidia (NVDA -3.00%) as well as originally developing industry-leading central processing unit (CPU) computer chips used in gaming and eventually cryptocurrency mining applications. Now it is the leading provider for artificial intelligence (AI) applications.
Looking back to look forward
Nvidia has been all the rage among market watches lately, but the company has been around for over 30 years. It has been publicly traded since early 1999. CEO Jensen Huang was one of the founders who initially wanted to develop graphics chips for personal computers. The CUDA (compute unified device architecture) software platform was launched almost two decades ago and is now a key part of the investment case.
The focus in the early years was on performance improvements in 3D graphics used in the gaming industry. But stock performance lagged until the early 2020s, when sales began to grow from Nvidia’s RTX platform, which uses AI to create realistic graphics and visual effects for gaming, 3D design and other uses.
Huang’s keynote speech at the recent CES conference was used to introduce the RTX 50 series chips that use Nvidia’s Blackwell graphics processing unit (GPU) architecture in the company’s AI accelerators.
That circle of innovation is what investors should keep in mind to see what Nvidia can do in the next decade. And Huang gave everyone a brief introduction to what’s going to happen in that keynote address at CES.
Artificial intelligence (AI) will trigger a new wave of growth
Nvidia’s recent stock returns have been nothing short of phenomenal. As AI drives the need for more computing power, quarterly revenue has increased by more than 1,000% since 2020. Much of this in the past two years has come as major technology companies have spent a lot of money building data centers needed for AI applications.
These companies are still investing to increase computing power. Microsoft President Brad Smith recently said his company expects to invest $80 billion in AI-enabled data centers used to train models in fiscal 2025. Smith noted, “None of this progress would be possible without new partnerships based on large-scale infrastructure investments that serve as the essential foundation for AI innovation and use.”
Amazon also recently announced plans to spend approximately $11 billion to expand its presence in Georgia to support Amazon Web Services’ (AWS) cloud computing and AI technologies.
Nvidia is perhaps the biggest beneficiary of this spending and investors have piled into the stock, sending the stock up more than 2,000% since 2020.
Robotics and autonomous vehicles
Nvidia’s data center segment has dominated its revenue path lately, but gaming revenue is still growing and represented a meaningful 9.4% of total revenue last quarter. Huang sees a new path for growth coming. Nvidia’s second fastest growing segment in the most recent quarter was automotive and robotics, with revenue up 72% year over year.
In his speech at the CES conference, Huang talked a lot about robots and self-driving cars – two real-world applications made possible by AI. Huang sees the ‘robot era’ coming soon and groups both humanoid robots and self-driving cars in that category. He said it was the “llargest technological industry the world has ever seen.” Nvidia’s robotic operating system (ROS), Isaac, uses its CUDA-accelerated software packages and AI models to develop advanced AI robotics applications.
He also announced Nvidia’s next-generation processor for autonomous cars, called Thor. Thor processes the enormous amount of sensor information from cameras, radar and lidar (light detection and ranging) used on vehicles. Using Nvidia’s latest CPU and GPU improvements, including Blackwell architecture, Huang said Thor has 20 times the processing power of the previous generation chip, which is the standard today.
Nvidia’s growing ecosystem
The Thor processor is also used for humanoid robots. Huang described it as a “universal robotics computer.” You can see how each of Nvidia’s segments and innovations are connected. And that’s exactly why Nvidia stock could still be the best investment of the next decade.
Huang said he expects surprisingly rapid breakthroughs in general robotics in the coming years. And Nvidia provides all the supporting technologies. As if another growth segment were needed, Huang also introduced an AI desktop computer at CES that integrates Blackwell. He said, “Putting an AI supercomputer on the desks of every data scientist, AI researcher and student will enable them to engage and shape the era of AI.”
That desktop supercomputer will be available in May for a price of $3,000. It is another example of the company’s innovative approach, which pushes the boundaries of technology. Nvidia has a lot of ongoing projects and seems to be connecting them all somehow. It should be a core holding in any growth stock portfolio for the next decade.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Howard Smith has positions at Amazon, Microsoft and Nvidia. The Motley Fool holds positions in and recommends Amazon, Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has a disclosure policy.
