Everyone wants to retire a millionaire. But many will never realize this vision. How do you make sure that this future happens to you? Find large companies in which invest for decades at the same time.
Right now, artificial intelligence (IA) The revolution creates some of the greatest growth opportunities in history. Could Nvidia (Nvda 1.92%)) Is the stock your secret for a rich retirement? You might be surprised by the answer.
Nvidia’s growth course has just started
In recent years, Nvidia’s revenues have exploded above, not a small base either. In 2023, the company reported less than $ 40 billion in sales. Today, annual sales exceeded $ 130 billion, with the end of this growth trajectory anywhere in sight.
This is because, in many ways, the AI revolution has just started. And this is excellent news for Nvidia, given its GPU – critical components for the training and management of AI models – are largely considered the best in class at the moment.
According to the World Council McKinsey & Co., investments in new software and services of AI have become gangbusters in recent years. “Investments in equity in a generative AI increased from $ 5 billion in 2022 to 36 billion dollars in 2023,” said one of the recent reports of the company. The numbers of 2024 are probably significantly higher.
The firm weak The estimate has software and service income in AI going from $ 85 billion in 2022 to 1.5 billion of dollars in 2040. high The estimate sees industry income exceeding $ 4.6 billions by 2040. In other words, the rate of income growth for the AI sector should now be like that we have ever seen before.
I have writing Before how Cuda Developer Suite of NVIDIA created a locking effect of suppliers who could help him maintain the dominant market share for AI GPU for years, even decades, to come. All of this has been put in place that Nvidia will sell on a fast growing and really gigantic market with a cutting -edge product that developers need to make their innovation reality. This is really an incredible position to be – one of the main reasons why Nvidia’s evaluation has climbed into the billions of dollars.
To be fair, Nvidia’s stock is quite expensive on paper. It is surprising to see a business of billions of dollars obtain a price / sales ratio of 21.6. This has generally been considered a high multiple, even for significantly smaller companies.
NVDA PS ratio data by Ycharts
Will this stock make you a millionaire?
This raises the question: is Nvidia Stock still a purchase today? You might be surprised by the answer.
In the short term, everything is possible with the Nvidia stock. Multiple market darlings raised like this are subject to erratic changes in the feeling of the market. At the beginning of 2025, we experienced such a swing, with hundreds of billions of dollars destroyed Nvidia’s evaluation over a few days, with a Chinese start-up Deepseek announcing a chatbot created with cheaper fleas.
But here is the thing: Rich retirement generally does not happen overnight. It also does not happen by finding a single dignified investment. Retirement investment is a long game, where you stack the magic of interest composed in your favor. In other words, you need to fill your wallet with companies that can increase your money over time. This requires long periods of detention and a level of patience that few have.
The Nvidia stock is undoubtedly expensive. But long growth stretches can make almost all the multiple looks attractive with hindsight. The company has a sustainable competitive advantage due to the locking of suppliers, and its growth in the final market will be incredible to look at, even at the bottom of the estimates.
Those who seek to retire Rich should consider adding Nvidia actions to their portfolio today. But don’t forget that it will be time, and probably a well -balanced portfolio, which will lead the best retirement results.
Ryan Vanzo Has no position in the actions mentioned. The Motley Fool has positions and recommends Nvidia. The Word’s madman has a Disclosure policy.