In today's video, I discuss recent updates affecting Nvidia (NASDAQ: NVDA) and other semiconductor companies. To learn more, check out the short video, consider subscribing, and click the special offer link below.

*Stock prices used were the after-market prices of June 6, 2025. The video was published on June 8, 2025.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jose Najarro has positions in Advanced Micro Devices, Alphabet, Meta Platforms, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy. Jose Najarro is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

Just when some were thinking the artificial intelligence (AI) trade was dead, Nvidia (NASDAQ: NVDA) and other big tech stocks knocked their earnings reports out of the park. The fact is that investment in AI technology, data centers, and other infrastructure is booming with no end in sight.

Just last week, Amazon (NASDAQ: AMZN) announced plans to invest another $10 billion in new data centers in North Carolina. Big Tech companies are expected to spend $325 billion this year, a significant increase over the $223 billion invested in 2024. Far from being over, investment in AI is just getting started.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

As you can see below, the AI market is poised to experience significant growth through the end of the decade, and likely well beyond.

Here are two companies every tech investor should have on their radar.

Nvidia is still king

Nvidia's graphics processing units (GPUs) are critical infrastructure for data centers, and the big tech companies are battling to acquire as many as possible. For example, Elon Musk's xAI supercomputer initially started with 100,000 units, doubled this number to 200,000, and rumors suggest it plans to grow to 1,000,000 units in the future.

Projects like the one mentioned above for Amazon also require untold thousands of GPUs, and there are many of these projects in progress across the U.S. and the world. The incredible demand is not slacking and is the reason that Nvidia's results continue to dazzle.

Nvidia's data center revenue grew 73% year over year in the recently announced fiscal first quarter of 2026, reaching $39 billion, while total sales increased to $44 billion, representing 69% growth. As shown below, Nvidia's revenue and cash flow growth over the last few years is nothing short of incredible.

NVDA Revenue (TTM) data by YCharts

There is no indication that the growth won't continue in earnest. Nvidia expects $45 billion in sales for Q2 of fiscal 2026, representing a 50% year-over-year increase. The percentages decrease due to the laws of larger numbers; however, Nvidia will add $15 billion in total sales from Q2 of fiscal 2025 to Q2 of fiscal 2026 by achieving its target.

Nvidia stock currently trades with a price-to-earnings ratio of 46, well below its three-year average of 80. This drops to just 34 on a forward basis. While the exponential gains of the last few years may be over, Nvidia stock will still likely outpace the market, given the high demand for its products and its superior growth rate.

Don't sleep on Amazon's prospects

Pop quiz, investors. What is the biggest challenge that AI faces? If you said managing, processing, and securing data, you are correct! In fact, as shown below, all of the largest challenges center around data in one form or another.

This means that cloud providers, like Amazon Web Services (AWS), the largest cloud services provider on Earth, have massive growth runways as AI adopters seek data services. AWS is the straw that stirs Amazon's drink, as it accounts for the majority of its profits. In Q1, AWS provided 63% of Amazon's $18.4 billion in operating profits. Sales reached $29 billion, driven by robust 17% year-over-year growth, and the operating margin was impressive at 39%, demonstrating that AWS has excellent pricing power.

Amazon's other revenue streams also posted strong results. Digital advertising stood out with 19% year-over-year growth to $14 billion in Q1 sales. Overall, Amazon achieved 9% total sales growth, with total revenue reaching $156 billion. Net income increased to $17 billion from $10 billion in the same period last year.

The results are simply too good to be ignored. Amazon stock is historically undervalued, despite its stock price being on a general upward trajectory, as shown below.

AMZN data by YCharts

AWS will thrive in the age of artificial intelligence, and so will Amazon. This appears to be an excellent opportunity for investors to purchase shares that are at least fairly valued, and possibly undervalued.

The AI industry is growing rapidly, and these industry titans will continue to benefit tremendously. Economic policy, such as tariffs, remains a wild card that investors should keep an eye on; however, the economy is proving quite resilient, and companies like Nvidia and Amazon are excellent long-term investments that will appreciate long after the tariff drama has run its course.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Bradley Guichard has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Nvidia. The Motley Fool has a disclosure policy.

Nvidia (NASDAQ: NVDA) CEO Jensen Huang thinks that data center operators will spend $1 trillion every year on chips and infrastructure by 2028 to meet growing demand for computing capacity from next-generation artificial intelligence (AI) models.

That spending will be an enormous tailwind for Nvidia, which supplies the world's most powerful data center chips for AI development. But the benefits will also flow through to the company's competitors, not to mention suppliers of other data center hardware components. There is an opportunity for investors to profit from this tech revolution, and buying an exchange-traded fund (ETF) might be the simplest way to do so.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

The iShares Semiconductor ETF (NASDAQ: SOXX) invests exclusively in suppliers of chips and components, and its top holdings happen to be three of the biggest names in AI: Nvidia, Broadcom (NASDAQ: AVGO), and Advanced Micro Devices (NASDAQ: AMD). The ETF has outperformed the broader stock market since its establishment in 2001, and here's how it could turn an investment of $250,000 into $1 million within the coming decade.

The biggest names in AI hardware in one ETF

Some ETFs hold thousands of different stocks, but the iShares Semiconductor ETF holds just 30. It aims to offer investors exposure to companies that design, manufacture, and distribute semiconductors, primarily those that stand to benefit from megatrends such as AI.

Since the ETF was established in 2001, it has helped investors successfully navigate several tech revolutions driven by the internet, enterprise software, smartphones, and cloud computing. It's now heavily geared toward AI, and its top five holdings are among the biggest names in the hardware side of the industry:

Stock	iShares ETF Portfolio Weighting
1. Broadcom	10.07%
2. Nvidia	8.74%
3. Texas Instruments	7.49%
4. Advanced Micro Devices (AMD)	7.30%
5. Qualcomm	5.83%

Data source: iShares. Portfolio weightings are accurate as of June 4, 2025, and are subject to change. ETF = exchange-traded fund.

Nvidia's graphics processing units (GPUs) are the most popular data center chips among AI developers. The company's latest GPU architectures, Blackwell and Blackwell Ultra, are designed for a new generation of AI models capable of 'reasoning,' which means they spend time thinking in the background to generate the most accurate responses.

Jensen Huang says some of these models consume up to 1,000 times more computing capacity than traditional one-shot large language models (LMs), hence his lofty spending forecast mentioned earlier.

Amazon, Microsoft, and Alphabet are three of Nvidia's biggest customers. They are seasoned data center operators because of their industry-leading cloud platforms, but they are now racing to build AI infrastructure to meet surging demand from developers.

But these companies are also trying to diversify their hardware portfolios by designing their own chips in collaboration with suppliers like Broadcom, which helps with the design and manufacturing processes. Broadcom is targeting a $90 billion market opportunity for its custom AI accelerator chips by 2027, with just three customers already on board and more in the pipeline. Plus, the company is a leading supplier of networking equipment, which helps to extract the most performance from AI chips.

Then there is AMD, which released a line of GPUs to compete directly with Nvidia in the data center. This year, the company will start shipping its latest chips based on its CNA (Compute DNA) 4 architecture, which was designed to rival Blackwell. AMD is also already a leader in AI chips for personal computers, which could be a major growth area in the future.

Investors will also find other leading AI chip stocks, such as Micron Technology, Taiwan Semiconductor Manufacturing, and Arm Holdings, outside the top five holdings in the iShares ETF.

Turning $250,000 into $1 million in the next decade

The iShares Semiconductor ETF has delivered a compound annual return of 10.4% since its establishment in 2001, outperforming the average annual gain of 7.9% in the S&P 500 over the same period. But the ETF has delivered an accelerated annual return of 20.9% over the past decade, driven by the accelerating adoption of technologies like cloud computing and AI.

If the iShares ETF continues to deliver annual gains of 20.9%, it could turn a $250,000 investment into over $1.6 million in the next decade. It won't be easy, but if AI infrastructure spending grows to $1 trillion per year by 2028, as Jensen Huang expects, it certainly isn't out of the question.

However, even if the ETF averages an annual gain of 15.6% over the next 10 years, that would be enough to turn $250,000 into $1 million:

Starting Balance	Compound Annual Return	Balance in 10 Years
$250,000	10.4%	$672,404
$250,000	15.6% (midpoint)	$1,065,413
$250,000	20.9%	$1,668,026

Calculations by author.

Last year, Huang said data center operators could earn $5 over four years for every $1 they spend on Nvidia's AI chips and infrastructure by renting the computing capacity to AI developers. If those economics are accurate, data center operators like Amazon, Microsoft, and Alphabet are likely to continue investing heavily in new infrastructure long into the future.

Plus, every new generation of AI models typically requires even more computing capacity than the last, so it's possible that Huang's spending forecasts will prove to be conservative when we look back on this moment. In any case, the iShares ETF could be a great addition to a diversified portfolio.

Should you invest $1,000 in iShares Trust - iShares Semiconductor ETF right now?

Before you buy stock in iShares Trust - iShares Semiconductor ETF, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and iShares Trust - iShares Semiconductor ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Microsoft, Nvidia, Qualcomm, Taiwan Semiconductor Manufacturing, Texas Instruments, and iShares Trust-iShares Semiconductor ETF. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

The AI revolution is here. Over the next decade, many experts believe that the artificial intelligence market will grow from a few hundred billion dollars in value to nearly $5 trillion. Fortunes will be made throughout this growth journey, and one new ETF from popular analyst Dan Ives seeks to give investors a one-stop shop for investing in AI.

Looking to add AI exposure to your portfolio? There are three reasons to consider the Dan IVES Wedbush AI Revolution ETF (NYSE:IVES).

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

1. Experts will guide your AI investments

Many investors love to do their own research and select their own individual investments. But when it comes to investing in AI stocks, having some experts along for the ride can help a lot. Right now, there are many popular AI stocks that growth investors are flocking to. But the winners during the next phase or two of these cycles may not be the winners of today.

"I've started this ETF because it's about the second, third, fourth derivatives of AI playing out, and that's the important thing for investors," Ives recently explained. "The AI revolution is the biggest tech theme we've ever seen," he added."There are plenty of other great vehicles out there, but there's only one that encompasses my investing team and the research that investors have trusted me to deliver."

2. Stay 100% invested in artificial intelligence

There are several new AI ETFs out there, but many invest in companies that aren't directly tied to AI. Amazon, for example, is exposed to AI through its AWS cloud infrastructure division. But that division contributes less than half of its total revenue. The movement of Amazon's stock, therefore, may be unduly influenced by its e-commerce division, not its AWS division, which provides it with its most direct AI exposure.

The IVES ETF, meanwhile, aims to maximize your AI exposure by investing in just 30 companies handpicked from Ives's "AI Revolution Theme," which only aggregates stocks with meaningful exposure to AI infrastructure, deployment, and monetization. That includes AI stalwarts like Nvidia, which produces most of the industry's GPUs, and Microsoft, which has a much higher raw AI exposure than Amazon.

3. Get in early

The beauty of ETFs like this is that they let you scale up your exposure quickly. Yes, you are getting expert stock selection. You're also making sure your invested capital is as exposed as possible to the actual AI themes you're attempting to target. But by outsourcing your picks to an ETF, you also give yourself the ability to scale up your exposure at a moment's notice without needing to do a bunch of research on individual selections. In short, vehicles like the IVES ETF let you get quick exposure earlier than you would have if you needed to complete all of your own research and allocation decisions.

"Two trillion dollars is going to be spent over the next three years," Ives estimates. "Now, I believe we're still in the bottom of the first inning in terms of this non-inning game for AI. And the second, third derivative beneficiaries of tech are just starting to focus on AI." If you agree with Ives -- that is, if you think that we are still in the very early innings of the AI revolution -- then getting your money to work today rather than tomorrow may give you a chance to lock in early cycle valuations before the rest of the market catches on.

The IVES ETF isn't perfect. It comes with a very high 0.75% expense ratio, which will cut into your profits. It also has no historical track record, adding some level of uncertainty for its performance potential. Plus, Ives himself has said that he doesn't care much for valuations. "I've never been too focused on valuations," Ives recently said. "It's about the themes, the best places, and the disruptors. That's all the work we do in the field."

Investors looking to do their own research, limit fees, and focus on valuation should likely look elsewhere. But for those willing to get instant exposure to expert AI stock selections, the IVES ETF is a promising new investment vehicle for aggressive growth investors.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

The technology sector has helped lead the market higher over the past decade, and with new technologies such as artificial intelligence (AI) and autonomous driving continuing to emerge, there is every reason to believe it can do the same over the next decade.

Let's look at three leading tech companies to buy this year.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

1. Nvidia

Graphics processing units (GPUs) maker Nvidia (NASDAQ: NVDA) has established itself as the leading semiconductor company in the world. The strength of GPUs lies in their parallel processing capabilities, which allow them to perform many calculations at the same time. This capability makes these powerful chips ideal for running AI workloads in the data center.

The real secret to Nvidia's successes, though, is its CUDA software program. Created to expand the market for GPUs beyond their original intent of speeding up graphics rendering in video games, Nvidia aggressively pushed the software platform into universities and research labs in its early days, which helped make it the platform upon which developers learned to program GPUs for various tasks.

In the years since, the company has built a collection of tools and libraries that help improve the performance of its GPU for use in running AI workloads. This has helped give the company a dominant market share in the GPU space of more than 80%.

As the AI infrastructure market continues to grow, Nvidia continues to be the biggest beneficiary. However, that's not its only growth market, and the company also sees a big future opportunity in the automobile and autonomous driving sector. After all, autonomous vehicles need to perform quick calculations, which is the strength of GPUs, so they don't crash.

Since Nvidia doesn't have a recurring revenue stream, any slowdown in its end markets is a risk, but right now these markets still appear to be in the early days of their growth cycles.

2. Alphabet

Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) is certainly not without its risks, as some investors fret over AI disrupting its search business, while at the same time, it faces legal remedies from the U.S. government after losing an antitrust trial. However, the company has a collection of very attractive businesses and investors have largely ignored the advantages in search the company has.

Alphabet is about much more than Google search. Its YouTube business is not only the most-watched streaming platform, but it is also one of the largest digital advertising platforms in the world.

Meanwhile, its cloud computing unit, Google Cloud, is Alphabet's fastest-growing business, as it helps customers build out and run AI models and apps on its platform. Also not to be overlooked is its robotaxi business, Waymo, which has a first-mover advantage in the U.S. and is expanding rapidly.

That said, Google is still Alphabet's bread and butter, but it's not time to write this dominant search engine off just yet. Google has a large distribution and ad network advantage that should not be overlooked. Its distribution advantage comes from its popular Android smartphone operating system and Chrome browser, which use its Google search engine as a default.

Meanwhile, it has a revenue-sharing agreement with Apple and browser companies like Opera to run their search queries, as well. In addition, it has spent decades building one of the largest ad markets on the planet, with an ability to serve not only national advertisers, but also local businesses.

Alphabet also knows how to monetize search better than any company, and as the world moves toward AI search and chatbots, it's focused on profiting from queries that have commercial intent. That's why when it recently launched its new AI search mode, it included several commerce-focused features aimed at enhancing monetization, such as "Shop by AI," which allows users to find products simply by describing them, virtually try on clothes using a photo, and even track prices.

With unmatched distribution, a massive ad network, and a focus on commerce monetization, Alphabet is well situated to be an AI search winner.

3. Salesforce

Salesforce (NYSE: CRM) has long been the leader in customer relationship management software, and now it's setting its sights on becoming a leader in AI agents through its new Agentforce platform.

The company's core value proposition has always been about unifying customer data, and it has expanded this concept into the data center with its Data Cloud offering. Through acquisitions, it's also established a leadership position in employee and customer-facing apps, such as Slack and Tableau. This type of ecosystem is an ideal environment for AI agents to interact with this data and use it to automatically perform tasks.

Agentforce includes pre-built AI agents that can help businesses streamline tasks, as well as low-code and no-code tools that let customers design their own custom AI agents with little technical expertise. It has also established an Agentforce marketplace with more than 200 partners to offer more templates and broaden use cases. Thus far, Agentforce has seen solid momentum, with it already having more than 4,000 paying customers since its October launch and many more in pilots.

Salesforce is looking to lead a digital labor revolution. It plans to accomplish this through its ADAM framework that combines agents, data, apps, and metadata into one platform. It recently introduced a new consumption-based model that better aligns agent costs with business outcomes to help improve customer satisfaction and increase adoption.

Agentic AI is a competitive space, but Salesforce looks like it has the platform to be a winner.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Geoffrey Seiler has positions in Alphabet, Opera, and Salesforce. The Motley Fool has positions in and recommends Alphabet, Apple, Nvidia, and Salesforce. The Motley Fool has a disclosure policy.

There will prove to be many winners as artificial intelligence (AI) infrastructure continues to grow and AI end-uses expand. Nvidia (NASDAQ: NVDA) has been the Wall Street darling surrounding everything AI for the past two years.

CoreWeave (NASDAQ: CRWV) has been getting the love most recently, though. Shares of the AI hyperscaler providing cloud services have soared about 185% in just the past month as of this writing. Nvidia stock has increased 24% in that time. CoreWeave just went public in late March, and the shares have jumped about 270% since that initial public offering (IPO). Investors may wonder if Nvidia's shine is fading, and it's time to buy CoreWeave instead. I'd argue that is flawed thinking, however.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

The growth isn't over for Nvidia

Investors may be taking a breather after the early exponential gains in Nvidia stock. Growth in the business itself has also slowed, though that was inevitable. Sales of its advanced chips in the data center segment had been growing like a weed. Revenue in that segment has been increasing in each consecutive quarter for the last two years. In the most recent fiscal quarter, that growth rate slowed to 10%, though, as seen below.

Despite that trend, it's clear AI demand hasn't yet peaked. Remember, these are still sequential quarterly increases in data center sales. For perspective, that fiscal first-quarter revenue was a 73% jump compared to the prior year period. Management also guided investors to expect further revenue growth in the current quarter. So, while an unsustainable growth rate slows, the company is still solidly in growth mode.

Nvidia is more ubiquitous than you might think

That's because it's not just Nvidia's advanced GPU and CPU chips driving sales and expanding AI infrastructure. Its AI ecosystem includes interconnect technologies, the CUDA (compute unified device architecture) software platform, and artificial intelligence processors that are part of many different types of architectures.

CEO Jensen Huang recently touted Nintendo's new Switch 2 gaming console, for example. The unit includes Nvidia's AI processors that Huang claims "sharpen, animate, and enhance gameplay in real time."

Nvidia has a broad array of customers. As AI factories and data centers are built, it will continue to be a major supplier and one that investors should benefit from owning. Nvidia also invests in the AI sector. It makes sense to look at where the AI leader itself sees future gains.

Nvidia thinks CoreWeave is a good investment

One of the AI companies in which Nvidia holds a stake is CoreWeave. Nvidia should know CoreWeave well, too, as an important customer. CoreWeave leases data center space to companies needing the scalable, on-demand compute power it has control of from the 250,000 Nvidia chips it has purchased.

It's a desirable option for enterprises that require significant computational power to process large amounts of data efficiently. There appears to be plenty of demand. But there is plenty of risk for investors, too. It just announced a new lease agreement to further increase capacity.

Applied Digital, a builder and operator of purpose-built data centers, has agreed to deliver CoreWeave 250 megawatts (MW) of power load on a 15-year term lease at its recently built North Dakota data center campus. CoreWeave has the option to expand the load by an additional 150 MW in the future.

Demand is quickly driving growth for CoreWeave. That's led investors to jump in and drive the stock higher in recent months. Valuation is just one major risk with CoreWeave. Customer concentration is another. Last year, Microsoft accounted for nearly two-thirds of revenue. CoreWeave also disclosed that 77% of 2024 revenue came from just its top two customers.

CoreWeave is also spending massive amounts of capital to grow AI cloud capacity. It had about $5.4 billion of liquidity available as of March 31 and raised another $2 billion from a late May debt offering. That's approximately its level of capital expenditure in just the first quarter alone, though.

CoreWeave has the risk, Nvidia has the profits

That spending may pay off. But there are risks there as well. Customers could develop their own AI infrastructure or could redesign systems that don't require its services. CoreWeave stock also trades at a high valuation after the stock has soared. It recently had a price-to-sales (P/S) ratio of about 30.

That could be cut in half this year with its strong sales growth, but it isn't earning any money yet. At the same time, Nvidia sports a price-to-earnings (P/E) ratio of about 30 based on this year's expected profits.

Remember, too, that as CoreWeave grows, so do Nvidia's profits. Applied Digital CEO Wes Cummins said that its leased North Dakota data center campus will be full of Nvidia Blackwell class servers. I think the risk profile, financial picture, and massive potential for Nvidia make it the better AI stock to buy now.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Howard Smith has positions in Microsoft and Nvidia. The Motley Fool has positions in and recommends Microsoft and Nvidia. The Motley Fool recommends Nintendo and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

A million dollars is enough to change most people's lives. For example, putting that money into relatively low-risk assets like 30-year Treasury bonds would earn you more than the U.S.'s median annual income without reducing the principal. But while investing a million dollars is easy, making it is significantly harder.

To earn multibagger returns in the stock market, you typically have to bet on innovative companies with strong economic moats and massive addressable markets. Nvidia (NASDAQ: NVDA) has historically fit this bill with its industry-leading artificial intelligence (AI) chips. That said, past returns don't guarantee future success. Let's dig deeper to see if this megacap technology leader is still a long-term winner.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

First-quarter earnings were a mixed bag

Many analysts were optimistic about Nvidia's first-quarter results, which saw its sales jump by 69% year over year to $44.1 billion while net income increased by 31% to $22.1 billion. Big tech companies continue to pour billions into Nvidia's hardware to run and train their generative AI workloads. And Nvidia's CEO, Jensen Huang, continues to strike an optimistic tone, claiming that entire countries are beginning to realize that AI is an "essential infrastructure" alongside electricity, water, and the internet.

However, behind the hype, there are some signs that Nvidia's business is slowing. While sales grew 69% this year, that represents a deceleration from last quarter when they grew by 78% compared to the prior-year period. Furthermore, Nvidia's gross margins are also shrinking (down from 73% last quarter to 60.5% this quarter). Net income actually fell by 15% from the previous quarter -- an undeniable sign that things are changing.

Some of the weakness is due to recent regulatory challenges in China, where the Trump administration made it harder for Nvidia to sell its H20 chips, leading to a $4.5 billion impairment charge based on losses on excess inventory and failed purchase obligations. And while Nvidia plans to reenter the market with new products, investors should keep in mind the risk of continued regulatory setbacks.

Over the long term, Nvidia will face competition from homegrown Chinese rivals such as Huawei, which aims to take its market share with advanced AI chips of its own. And it is unclear if Chinese consumers will be comfortable building their businesses around Nvidia hardware that can be taken away at the whim of the U.S. government.

Nvidia also faces challenges in the U.S., where major customers like OpenAI are investing in their own custom chip design capacity to reduce their reliance on Nvidia and other third-party hardware suppliers.

Investors should change how they look at Nvidia

Nvidia has historically been a growth stock capable of multibagger returns. However, with its current market cap of $3.4 trillion, this is becoming less likely. If Nvidia were to repeat the 1,500% return it has enjoyed since 2020, its market cap would swell to $51 trillion. That would be more than the combined value of all companies on the NASDAQ stock exchange, which currently totals approximately $30 trillion.

While this level of expansion is technically possible, it looks doubtful, even in the best-case scenario. Even though Nvidia has a strong moat, free-market capitalism typically leads to competition and falling margins, which already begins to show up in Nvidia's most recent earnings report.

That said, although Nvidia might be too big to be a typical millionaire-maker stock, that doesn't mean it can't return value to investors in other ways. With a forward price-to-earnings (P/E) ratio of 32.4, shares are still reasonably affordable, considering the company's growth rate. Investors should expect Nvidia to eventually start returning some of its massive profits to shareholders through dividends and buybacks, which can help support slow and steady stock price appreciation.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

The U.S. equity market made a strong recovery in May 2025, fueled by robust earnings, decreasing trade tensions, and rising investor confidence in the U.S. economy -- a significant improvement compared to the market's performance in April 2025. Now, Deutsche Bank analysts have raised the target for the benchmark S&P 500 index from 6,150 to 6,550 by the end of 2025.

Given this renewed market optimism, artificial intelligence (AI) stocks are poised to be key beneficiaries of the next wave of capital inflows. Long-term investors can benefit from this trend by investing in these high-quality, artificial intelligence (AI)-powered companies that offer significant growth potential in the evolving market landscape. June is a good time to take a closer look at these three top AI stocks.

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1. Nvidia

Nvidia (NASDAQ: NVDA) has reported stellar results for the first quarter of fiscal 2026 (ended April 27, 2025). The company reported revenue of $44.1 billion, representing a 69% year-over-year increase. Nvidia also generated a solid $26 billion in free cash flow.

Nvidia currently accounts for nearly 80% of the AI accelerator market. While a dominant presence in AI training workloads, the company is also focused on inference (real-time deployment of pre-trained models) workloads. The company is at the forefront of handling reasoning workloads (computationally intense and complex inference workloads) with its Blackwell architecture systems. Major cloud providers are already deploying these chips at a massive scale -- almost 72,000 GPUs weekly -- and plan to ramp up even more in the coming quarter. Hence, Blackwell is powering the next phase of AI where technology is thinking longer, solving problems, and giving better answers than just responding with pre-written answers.

Besides hardware leadership, Nvidia's robust software ecosystem has ensured developer lock-in and a sticky customer base. With the CUDA parallel programming platform, TensorRT for deployment, and NIM microservices for inference, clients find it extremely costly and time-consuming to switch to competitors. The company has also built a healthy networking business, with this segment's revenue growing 64% quarter over quarter to $5 billion in the first quarter.

Thanks to the technological superiority of its comprehensive ecosystem, Nvidia managed to provide a healthy outlook for fiscal 2026's Q2, despite its revenue being negatively affected by nearly $8 billion due to export restrictions for the Chinese market.

Nvidia stock trades at 31.8 times forward earnings, which is not a particularly cheap valuation. But considering its growth trajectory and competitive advantages, Nvidia is a smart AI pick now, even at elevated valuation levels.

2. Broadcom

Broadcom (NASDAQ: AVGO) has emerged as a prominent AI infrastructure player in 2025. The company's custom AI chips and networking solutions are being increasingly used by three prominent hyperscaler clients -- rumored to be Alphabet, Meta Platforms, and Chinese company ByteDance -- to optimize the execution of their specific workloads.

CEO Hock Tan expects the three hyperscalers to generate a serviceable addressable market (SAM) of $60 billion to $90 billion in fiscal 2027. Additionally, the company is engaging with four additional hyperscalers to develop custom chips, underscoring the even larger market potential.

Beyond custom chips, Broadcom is building the critical networking infrastructure that enables the training and deployment of large and powerful frontier AI models. The company's recent $69 billion acquisition of VMware positioned it as a key player in the enterprise software and hybrid cloud infrastructure space. With VMware's cloud orchestration and virtualization technologies, Broadcom can offer full-stack AI infrastructure solutions to its clients.

Broadcom stock currently trades at 37.8 times forward earnings. However, considering its critical role in building global AI infrastructure, the company is an excellent pick, despite the rich valuation.

3. CoreWeave

Previously a cryptocurrency mining operator, CoreWeave (NASDAQ: CRWV) has now positioned itself as a prominent "AI Hyperscaler."

Unlike traditional hyperscalers such as Amazon's AWS, Microsoft's Azure, or Alphabet's Google Cloud Platform, which are primarily designed for general-purpose applications, CoreWeave's cloud infrastructure has been specifically designed for AI and machine-learning workloads. The company has established an extensive network of 33 purpose-built AI data centers across the United States and Europe.

Solid demand for CoreWeave's specialized AI-first cloud infrastructure is directly driving its exceptional financial performance. The company reported $982 million in revenue in the first quarter of fiscal 2025, up 420% year over year. At the same time, the company's adjusted operating income rose 550% year over year to $163 million. This highlights that the company is on its way to becoming profitable, despite the high level of capital expenditures typical in the AI data center business. The company had a massive $25.9 billion revenue backlog from multi-year contracts at end of the first quarter.

CoreWeave's strategic partnership with Nvidia is proving to be a significant competitive advantage. The deep relationship has given the company preferential access to Nvidia's cutting-edge GPUs and advanced networking technologies. With Nvidia having more than a $2.5 billion equity stake in CoreWeave (at current prices), the latter is practically assured of continued access to next-generation GPUs in the coming years.

CoreWeave stock currently trades at 37.5 times sales, which seems quite rich. However, the elevated valuation is justified considering the company's huge addressable market, robust contract backlog, and impressive financial performance, making it a buy now.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Manali Pradhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Artificial intelligence (AI) is sweeping across every industry. Researcher IDC forecasts that AI will contribute a total of nearly $20 trillion to the global economy over the next five years. By 2045, AI could drive enormous returns for investors who invest in the right stocks.

Here are two stocks that could deliver tremendous returns over the next 20 years.

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1. Nvidia

Nvidia's (NASDAQ: NVDA) dominance in the market for graphics processing units (GPU) -- vital hardware for handling AI workloads -- has placed it in a lucrative position. Even after its meteoric rise over the last few years, the chipmaker still has plenty of growth ahead.

Two years ago, on the company's fiscal Q4 2023 earnings call, CEO Jensen Huang stated, "I believe the number of AI infrastructures is going to grow all over the world." He expected to see more AI data centers built, and that Nvidia's chips, networking products, and software systems would help accelerate AI computing by a factor of 1 million times over the coming 10 years.

Nvidia's latest quarterly report shows that Huang's prediction is continuing to play out. In a quarter where its revenue grew 69% year-over-year, Nvidia saw accelerating deployments of AI-purposed data centers, aka AI factories. There are nearly 100 Nvidia-powered AI factories in progress right now -- twice as many as there were a year ago.

These specialized data centers are being built across every industry and geography. Nvidia is in a solid competitive position with its in-demand full-stack solutions that cover hardware, networking components, software, and systems. Its networking revenue alone jumped 64% over the previous quarter, reflecting a massive jump in demand for networking components to handle the massive growth in data processing and AI workloads that's happening now.

Industry estimates pointing to a $1 trillion data center opportunity could be underestimating the actual long-term opportunity for Nvidia. Nvidia has generated more than $148 billion in trailing 12-month revenue and its top line is still growing by more than 50% year over year. That trajectory for a company of this size indicates an enormous opportunity.

Nvidia is playing a vital role in meeting the demand for AI. While at some point there could be a slowdown in data center spending that saps Nvidia's momentum, the combination of its powerful GPUs and its popular networking and software solutions provides it with a wide competitive moat. The stock should continue to deliver long-term growth, as it has over the last quarter of a century.

2. Meta Platforms

Facebook and Instagram owner Meta Platforms (NASDAQ: META) could be a sleeper AI beneficiary over the long term. When AI ushers in time-saving services like fully autonomous robotaxis, people will have a lot more time to do other things, such as browsing social media. That's just one way AI could benefit Meta's business over the next 20 years that is not reflected in the stock's valuation.

Investors can get a hint of the impact that AI could have on Meta's business by looking at how much the company is investing in the technology. It is planning for capital expenditures of at least $64 billion in 2025, and those investments will go primarily toward data centers. (Investors should note that this rising spending on hardware is also ringing the cash register for Nvidia.)

Meta's high returns on capital show that it doesn't spend money like this unless management sees attractive returns down the road. The company is investing in AI for a number of initiatives, including new experiences to drive more useful and immersive experiences across its family of apps.

One of the ways it brings more useful content is by showing its users more relevant ads. Over the last few years, Meta has benefited from a growing digital ad market that has started to implement AI technology for improved ad targeting. Revenue grew 22% in 2024, and much of this momentum continued in Q1 2025, when revenue rose by 16% year over year.

Meta could also benefit from the launch of new devices powered by AI, such as its Meta AI glasses. More than 1 billion people wear glasses, and Meta believes that in the future, AI will be integrated into a large number of these glasses. So far, it seems to be tapping into a big opportunity, as sales of Meta's Ray-Ban AI glasses have tripled over the last year.

More than 3.4 billion people use Meta Platforms' apps every day. That's a huge built-in audience for it to leverage AI technology to grow the value of the business. Its current valuation of 27 times forward earnings estimates is a reasonable price, and leaves plenty of potential for the company's growth to drive healthy stock price gains over the long term.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Ballard has positions in Nvidia. The Motley Fool has positions in and recommends Meta Platforms and Nvidia. The Motley Fool has a disclosure policy.

Though Apple has been Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) top holding for several years, Warren Buffett has historically avoided tech stocks.

The renowned value investor has said that he can't forecast earnings for tech companies as they are less predictable, due in part to the changeable nature of technology, than other sectors. Buffett has historically preferred to invest in sectors like insurance, banking, utilities, energy, and consumer staples that have predictable cash flows, and whose industries don't change much over time.

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Based on that philosophy, it's not a surprise that Buffett has mostly avoided artificial intelligence (AI) stocks. However, there are some that fit in well with his approach to investing -- buying companies with sustainable competitive advantages at attractive valuations.

Keep reading to see two stocks that fit the bill.

1. Alphabet

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) has one of the strongest economic moats in business history.

Google has had more than 90% market share in the web search industry for the last two decades. The brand is synonymous with search, and underpins Alphabet's larger, highly profitable tech empire that includes products like YouTube, Google Cloud, the Chrome web browser, and "moonshots" like the Waymo autonomous vehicle program.

Google Search has now reached a revenue run rate of $200 billion, and Google Services, of which search makes up most of its business, has an operating margin of more than 40%.

Alphabet is also still delivering steady growth with revenue up 12% in the first quarter.

You might think that a company like Alphabet with evident competitive advantages, solid growth, and massive profits would trade at a premium valuation, but that's not the case. Alphabet currently trades at a price-to-earnings ratio of just 18.6, a substantial discount to the S&P 500.

There are two primary reasons for the discount in valuation.

First, investors are fearful that the company could get broken up or face a substantial fine or a related punishment as it's been found to have a monopoly in both search and adtech. Separately, Alphabet also seems to be trading at a discount because of the risk that its search empire could be disrupted by an AI chatbot like ChatGPT or Perplexity.

While those are risks for Alphabet, shares have long traded at a modest valuation, meaning investors have historically underestimated the stock. Given that, investors may want to borrow from Buffett's mentality and buy Alphabet stock.

2. Taiwan Semiconductor Manufacturing

Berkshire Hathaway invested in Taiwan Semiconductor Manufacturing (NYSE: TSM) in 2022, buying $4.1 billion of the stock, but it sold out of that position completely just two quarters later. It wasn't clear why. It could have been because of the risk of an invasion by China into Taiwan.

Like Alphabet, Taiwan Semiconductor (also known as TSMC) has one of the strongest economic moats in the business world.

The company is the leading third-party semiconductor manufacturer with a market share of more than 50% in contract chips and more than 90% of advanced chips that are crucial for AI.

TSMC is the company that Apple, Nvidia, AMD, Broadcom, and other top semiconductor and tech companies turn to to manufacture their chips. In the first quarter, advanced chip technologies accounted for 73% of its total wafer revenue.

Its technological lead in a highly technical industry with high capital expenditures, and its customer relationships, give the company a significant competitive advantage. TSMC is also growing quickly, with revenue up 35% in the first quarter to $25.5 billion, and its operating margin improved to 48.5%, showing the company has significant pricing power.

Like Alphabet, TSMC is also cheaper than you'd expect for a company that's so dominant. The stock currently trades at a price-to-earnings ratio of 24, which is an excellent valuation for a business growing as fast as TSMC, and one that is a linchpin in the artificial intelligence boom.

It may never be clear why Berkshire Hathaway sold TSMC, but it's not surprising that Buffett's conglomerate bought it. In many ways, it looks like a classic Buffett stock.

Should you invest $1,000 in Taiwan Semiconductor Manufacturing right now?

Before you buy stock in Taiwan Semiconductor Manufacturing, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Taiwan Semiconductor Manufacturing wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Jeremy Bowman has positions in Advanced Micro Devices, Broadcom, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Apple, Berkshire Hathaway, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

In March 2020, I outlined where I thought tech giant Nvidia's business and stock would be in five years, or in March 2025. It's now a little past the five-year mark, so how did I do?

Overall, I'd give myself a B or a B+. I was mostly correct in my business predictions and accurate about what investors care about the most, the stock price: "I feel very comfortable predicting that Nvidia stock will solidly outperform the market over the next half decade," I wrote.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Indeed, from March 1, 2020 (when my five-year predictions article published) through March 1, 2025, Nvidia stock's total return was 1,760% -- nearly 15 times the S&P 500's return of 118%. In other words, Nvidia stock turned a $1,000 investment into a whopping $18,600 over this five-year period. (Nvidia stock's five-year return through the date of this writing, June 4, is a little lower, as the chart below shows. Shares are up since March 1; it's the change in the 2020 start date that slightly lowers their current five-year return.)

Nvidia stock's fantastic performance has largely been driven by the incredible demand for the company's graphics processing units (GPUs) and related technology that enable artificial intelligence (AI) capabilities.

Prediction 1: CEO Jensen Huang will still be leading the company

Status: Correct.

In March 2020, I wrote that "as long as [Huang] stays healthy, the odds seem in favor of his still being at Nvidia's helm in five years."

For context, Jensen Huang, who co-founded the company in 1993, turned 62 in February, according to public records.

Nvidia investors should certainly hope that Huang remains the company's leader for some time. As I wrote in June 2024:

Nvidia is many years ahead of the competition in AI-enabling technology thanks to Huang's foresight. Starting more than a decade ago, he began to steadily use profits from Nvidia's once-core computer gaming business to position the company to be in the catbird seat when the "AI Age" truly arrived.

Prediction 2: Nvidia will still be the leading supplier of graphics cards for computer gaming

Status: Correct.

Here's part of what I wrote in the March 2020 article:

Nvidia dominates the market for discrete graphics processing units (GPUs) -- the key component in graphics cards for desktop computer gaming. In the fourth quarter of 2019, the company controlled 68.9% of this market.

Nvidia has increased its leadership position over the last five years. In the fourth quarter of 2024, it had an 82% share of the desktop discrete GPU market, compared with longtime rival Advanced Micro Devices' 17% share, according to Jon Peddie Research. Intel, which entered this market in 2022, had a 1% share.

Growth in Nvidia's gaming market platform will be covered below.

Prediction 3: The global gaming market will continue its robust growth

Status: Correct.

In March 2020, I wrote: "In 2025, the gaming market should be much bigger [relative to 2020]."

By all counts -- the number of global gamers, total computer gaming market revenue, and computer gaming PC revenue -- the computer gaming market has grown solidly over the last five years.

And Nvidia has benefited nicely from this growth. In fiscal year 2020 (ended late January 2020), the company's gaming market platform generated revenue of $5.52 billion. In fiscal 2025 (ended in late January), this platform's revenue was $11.35 billion. This increase amounts to a compound annual growth rate (CAGR) of 15.5%.

This is strong growth for such a huge market. It might not seem so only because Nvidia's data center market platform's growth has been phenomenal over this same period.

In fiscal 2020, gaming was Nvidia's largest platform, accounting for 51% of its total revenue. In fiscal 2025, gaming was its second-largest platform behind data center, contributing about 9% of its total revenue.

Prediction 4: Nvidia's GPUs will still be the gold standard for AI training

Status: Correct.

In March 2020, I wrote:

The company's GPU-based approach to accelerating computing is considered the gold standard for DL [deep learning, the dominant type of AI] training, the first step in the two-step DL process. [The second step is inferencing.] This statement is extremely likely to hold true in 2025, in my opinion.

Since 2020, both AMD and Intel have launched GPUs for AI-powered data centers, but Nvidia's grip on this market -- which is growing like wildfire -- remains tight. IoT Analytics, a technology market research firm, estimates Nvidia had a 92% share of the data center GPU market in 2024.

As an added plus, since 2020, Nvidia's GPUs have gone from having very little share of the AI inferencing chip market to having the largest chunk of this market. Inferencing is the running of an AI application.

In fiscal 2020, Nvidia's data center platform's revenue was $2.98 billion. It skyrocketed to $115.2 billion in fiscal 2025, equating to about a 107% compound annual growth rate (CAGR). This amazing growth powered the data center to account for 88% of Nvidia's total revenue in fiscal 2025, up from 27% in fiscal 2020.

Prediction 5: The legalization of driverless vehicles will turbocharge its auto platform's growth

Status: My timeline was too optimistic.

In March 2020, I wrote: "In 2025, fully autonomous vehicles should be legal -- or very close to being so -- across the United States. Nvidia is well positioned to majorly profit from [this event]."

I wouldn't say that fully autonomous vehicles are "very close" to being legal across the U.S. This event seems at least a few years away. But I continue to believe this watershed event will "turbocharge" Nvidia's growth thanks to its widely adopted AI-powered DRIVE platform.

Prediction 6. The X factor

Status: Correct.

In March 2020, I wrote: "Nvidia is incredibly innovative, so there seems a great chance that the company will introduce at least one major new technology that takes nearly everyone by surprise."

Over the last five years, Nvidia has launched a good number of major new technologies that have likely taken most investors and Wall Street analysts by surprise.

One example is its Omniverse platform, which launched in 2021. This is a simulation platform that enables the creation of virtual worlds and digital twins. It's been widely adopted by a broad industry range of large enterprise companies -- including Amazon, PepsiCo, and BMW Group -- for uses such as designing products and optimizing facility workflow.

2020 article ending: And Nvidia's stock price in 2025?

Status: Correct.

Here's what I wrote in March 2020:

It's impossible to predict a company's stock price in five years because so many unknowns ... can have a huge influence on the market in general. That said, given the projections made in this article, I feel very comfortable predicting that Nvidia stock will solidly outperform the market over the next half decade.

Stay tuned. I'm planning on a predictions article similar to my 2020 one. Hint: It's going to be optimistic, as Nvidia's highly profitable strong revenue growth is far from over, in my opinion.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $869,841!*

Now, it’s worth noting Stock Advisor’s total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Beth McKenna has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Intel, and Nvidia. The Motley Fool recommends Bayerische Motoren Werke Aktiengesellschaft and recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy.

There's no denying that the emergence of generative artificial intelligence (AI) was the spark that lifted Nvidia (NASDAQ: NVDA) stock to new heights. In recent months, however, the future has been less certain. Concerns about how AI models will evolve and whether they will need the latest and greatest chips sent some investors to the sidelines. In fact, earlier this year, Nvidia stock plunged 37% on fears the company's best days were behind it.

It turns out the sky isn't falling after all. Nvidia has delivered two successive quarters of high-double-digit revenue growth, as demand for AI remains robust. Indeed, the stock is within striking distance of a new all-time high after notching gains of 50% over the past two months.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Let's take a step back and review the opportunity, Nvidia's place in the AI ecosystem, and whether it's too late to buy the stock.

Nvidia is still the gold standard

Nvidia's original claim to fame is developing the graphics processing units (GPUs) that generate lifelike images in video games. However, it was the adapting of that technology to train and run AI systems that catapulted the chipmaker to new heights. The popular narrative is that its rivals are on the verge of a better solution, but thus far anyway, none has been forthcoming.

The company established a beachhead in AI as early as 2013, giving Nvidia more than a decade-long head start on the competition. After developing processors focused on machine learning -- an earlier branch of AI -- Nvidia quickly became the gold standard, controlling as much as 95% of the market, according to CB Insights (via BBC News). That existing expertise gave Nvidia the advantage in the data center GPU space, where it currently controls an estimated 92% of the market, according to IoT Analytics.

The buildout of data centers to meet the growing demand of AI continues, which bodes well for Nvidia.

Nvidia's growth is (still) off the charts

While Nvidia's growth has inevitably slowed from the triple-digit pace it managed last year, it still runs circles around the competition. For its fiscal 2026 first quarter (ended April 27), the company generated record revenue of $44.1 billion, which surged 69% year over year. Adjusted earnings per share (EPS) of $0.81 climbed 33% -- but that was after a $4.5 billion hit related to export controls for H20 chips originally destined for China. If not for that one-time charge, EPS would have grown 57%.

Management expects the company's robust growth to continue. For its fiscal 2026 second quarter, Nvidia is guiding for record revenue of $45 billion, which would represent growth of 50%. This helps illustrate that despite tough triple-digit comps, Nvidia continues to grow at a remarkable pace.

Is Nvidia stock too expensive?

The stock's rebound over the past few months has come with a commensurate increase in its valuation, which begs the question: Has Nvidia stock gotten too expensive?

Investors might be surprised to learn that simply isn't the case. Nvidia stock is selling for roughly 33 times forward earnings (as of this writing), which is an attractive valuation for a company that's expected to grow its profits by 50% in the coming quarter.

Furthermore, when measured using the price/earnings-to-growth ratio (PEG ratio), Nvidia has a multiple of 0.56, when any number less than 1 is the standard for an undervalued stock.

It's still early innings

Despite the rapid run over the past two years, it's important to remember it's still early days for the adoption of generative AI. These groundbreaking systems have only been around for a little more than two years, and many believe the adoption cycle will continue for much of the next decade.

Estimates vary wildly regarding the potential size of the AI market but they can still give context regarding the size of the opportunity. The generative AI market could be worth between $2.6 trillion and $4.4 trillion annually in the coming years, according to global management consulting firm McKinsey & Company.

Given Nvidia's market-leading position, deeply entrenched technology, the magnitude of the opportunity, and its attractive valuation, I would argue it isn't too late to buy Nvidia stock. These aren't empty words: I added to my Nvidia position as recently as April.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $869,841!*

Now, it’s worth noting Stock Advisor’s total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Danny Vena has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

For the last couple of years, it's been easy to group the "Magnificent Seven" together. These massive companies have become the dominant tech players and have taken advantage of artificial intelligence (AI) like no other group of companies in the market.

But once President Donald Trump took office and enacted sweeping tariffs, the group began to diverge based on how tariffs impacted their supply chains and the types of products and services they sold.

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Microsoft (NASDAQ: MSFT) has been one of the strongest, most resilient performers in the group. Is it time to double down on Microsoft stock today?

Riding Azure's momentum

While all the companies in the Magnificent Seven operate in the tech sector, most of them have been able to develop diversified revenue streams. Microsoft has many unique tech businesses, including cloud services, Microsoft Office 365 products, gaming, LinkedIn, search and advertising, and more.

Luckily for Microsoft, many of these businesses are services the company provides and therefore are less impacted by tariffs, which likely explains its strong performance in 2025 (as of June 3).

MSFT data by YCharts.

But a big reason for the company's strong performance is Azure, which falls under the company's cloud services and products category. Azure and other cloud services revenue in the company's third fiscal quarter of 2025 (quarter ended March 31, 2025) grew 35% year over year.

Azure is the foundation of Microsoft's artificial intelligence offerings and business. Launched in 2010, Azure started as a cloud computing network of data centers that companies could run their business on instead of maintaining their own infrastructure.

Since then, Azure has branched out to offer numerous other products, including in artificial intelligence. Through a partnership with OpenAI, Azure provides AI models that developers and businesses can leverage to build their own AI applications. Microsoft has also integrated AI tools from Azure into its own applications, such as Microsoft 365 Copilot, to automate repetitive tasks and improve efficiency.

Many investors questioned Microsoft's significant capital expenditures (capex) on AI over the last two to three years, wondering when they would see a payoff, which has now started to play out. Interestingly, on the company's most recent earnings call, Microsoft CFO Amy Hood pointed out that it's getting harder to separate AI-related revenue from non-AI-related revenue, as the two are starting to feed off of one another.

Evercore analyst Kirk Materne raised his price target on Microsoft from $500 to $515 in late May and maintained a buy rating on the company. Materne said that not only is Microsoft all in on AI, but the more traditional cloud business also still has plenty of runway, considering only around 20% of information technology workloads run in the cloud today -- a number Materne thinks could eventually increase to 80%. And AI tools could be a way to bring more businesses onto the cloud. Materne estimates that Microsoft's AI revenue could reach upwards of $110 billion by fiscal year 2028.

Time to double down?

There are several reasons to double down on Microsoft. For one, it is arguably the company least impacted by tariffs in the Magnificent Seven. As Morningstar points out, the company "has minimal risk exposure to retail, advertising spending, cyclical hardware, or physical supply chains." This should make it more resilient as the trade war continues to play out.

Microsoft's cloud and AI business is also starting to thrive. The company is reaping benefits from all the capex spending and is well-positioned to further grow revenue as the digital transformation of the business world continues to progress. Finally, Microsoft is one of just a few companies in the world to hold the highest possible credit rating from both Moody's and S&P Global. This makes it a source of stability throughout the economic cycle.

Should you invest $1,000 in Microsoft right now?

Before you buy stock in Microsoft, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Microsoft wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $869,841!*

Now, it’s worth noting Stock Advisor’s total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Moody's, Nvidia, S&P Global, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Shares of Nvidia (NASDAQ: NVDA) rallied 24.1% in May, according to data from S&P Global Market Intelligence.

While Nvidia reported an earnings beat late in the month, that post-earnings gain only amounted to a small portion of May's gain.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Before the earnings release, Nvidia, like many technology stocks, rallied in a big way when tariff tensions eased in mid-May, after the U.S. and China announced a détente in their trade dispute, paving the way for talks. Around that time, the Trump administration also made deals for significant AI chip sales to the United Arab Emirates and Saudi Arabia.

Nvidia is part of the art of the deal

Like many technology and semiconductor stocks, Nvidia rallied in a big way after May 12, when U.S. and China agreed to ratchet down their tariffs on each other. The U.S. lowered its tariffs on Chinese goods from 145% to just 30%, which incorporates the 10% universal tariff and extra 20% tariff meant to penalize China for the flow of fentanyl to the United States.

Nvidia, like most stocks, especially technology stocks, rallied on the news, as these stocks had still yet to fully recover after the post-"Liberation Day" stock market crash on April 2.

The immediate "relief rally" was soon followed by the announcement of large AI deals the Trump administration struck with both Saudi Arabia and the UAE. In Saudi Arabia, Humain, a division of the Saudi Arabia Public Investment Fund, will build a 500 MW AI cluster, composed of "several hundred thousand" Nvidia GPUs, which will be deployed over the next several years. In addition, a deal was soon reached with the UAE's G42, whereby Nvidia will be able to ship 500,000 Nvidia chips, starting this year.

These big deals in the Middle East probably boosted Nvidia's growth expectations, as the current administration also officially nixed the Biden administration's "AI diffusion rule." That rule was supposed to go into effect May 15 and was to limit AI chip sales to certain countries depending on their friendliness to the U.S., as well as the potential for chips to be smuggled to adversaries such as China.

Yet while the administration relaxed chip sales to countries such as the UAE and Saudi Arabia, it erected even stronger barriers to China. In April, the Trump administration banned the sale of Nvidia's H20 chip to China, which was a modified version of Hopper deemed appropriate for the Chinese market. But without guidelines for a replacement, Nvidia had to take a $5.5 billion inventory charge to its H20 inventory.

Despite the Hopper limitation, Nvidia was still able to beat expectations for its fiscal first quarter ending in April and reported on May 28. In the quarter, revenue grew 69% to $44.1 billion, with adjusted (non-GAAP) earnings per share up 33% to $0.81. The lower profit growth was due to the H20 writedown, but Nvidia was able to beat expectations anyway.

All in all, the results seemed to reassure investors that the company should be able to manage geopolitical tensions, and that its supply issues ramping the new Blackwell chip have largely been resolved.

Bear and bull cases swirl about

After May's recovery, Nvidia trades at 44 times earnings and 31 times forward earnings.

That's a reasonable multiple if Nvidia can maintain its dominance in AI systems and find a way to regain some of its lost China revenue. This year, all eyes will be on the company's new Blackwell chip, as well as how Nvidia's customers innovate new and exciting AI use cases.

On the risk side, investors should watch for newer custom AI chips designed in-house by the cloud giants, which could continue to take share. While Nvidia is currently the dominant standard in neutral GPUs that work for a variety of uses cases, the emergence of custom chips that can run workloads at much lower prices could eventually slow down Nvidia's torrid growth.

So with Nvidia's stock now back closer to all-time highs, the risk-reward is more balanced today.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $657,385!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $842,015!*

Now, it’s worth noting Stock Advisor’s total average return is 987% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

Nvidia (NASDAQ: NVDA) has already been one of the best long-term investments in history. Since 1999, shares of the chipmaker have increased in value by more than 340,000%. An original investment of just $3 would have turned into $1 million over that timeframe!

But don't think the run is over. The next few decades should see the company grow its sales immensely, leading to big gains for patient investors. Here's why.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Nvidia sales will rise for decades to come

Nvidia's business model sits at the very center of the artificial intelligence (AI) revolution. Nearly all AI technologies require massive datasets and compute power to operate. Complex models crunch this data to provide relevant outputs for users. While some models can run locally, most popular models are run on the cloud, using distributed compute power that can scale up and down dynamically based on demand.

What technologies make cloud computing infrastructure possible? Graphics processing units, more commonly referred to as GPUs.

There is a wide variety of companies producing a wide variety of GPUs, each specialized for a different purpose. For a long time, Nvidia specialized in GPUs built for gaming environments. Next-gen gaming consoles and computers need vast amounts of graphics processing power. Specialized chips like Nvidia's allowed the industry to advance, creating better and more visually stunning games for users.

Nvidia recognized the potential of AI before many of its competitors. It invested heavily to make sure its chips and software were able to support the small but promising industry. As The New York Times summarizes:

Over more than 10 years, Nvidia has built a nearly impregnable lead in producing chips that can perform complex A.I. tasks like image, facial and speech recognition, as well as generating text for chatbots like ChatGPT. The onetime industry upstart achieved that dominance by recognizing the A.I. trend early, tailoring its chips to those tasks and then developing key pieces of software that aid in A.I. development.

That software component is perhaps Nvidia's biggest secret weapon. Over the next decade, the AI market is predicted to grow from several hundred billion dollars in value to nearly $5 trillion. Competition for GPUs will surely heat up, but Nvidia's software has created a sort of lock-in for customers.

Scores of AI applications have been built around Nvidia's hardware, and developers have been using its software for years to customize these chips to their exact specifications. Even if its hardware loses its performance edge, this software lock-in should give Nvidia heavy market share for decades to come, not to mention the reputation and capital necessary to continue improving its hardware or purchasing promising upstarts.

Big gains will require patience

Trading at 25 times sales, Nvidia stock is far from cheap. But in 2021, shares also traded at roughly 25 times sales, and yet shares have increased in value by nearly 800% since then.

Now that it's a $3.3 trillion business, many argue that Nvidia will face steeper hurdles to fast growth. The law of large numbers may prove this true. After all, it's easier to double in size as a $200 billion company than as a $2 trillion one. But Nvidia has a stranglehold on its market, with some estimates pegging it with a 90% market share for AI GPUs. Meanwhile, the AI market is taking off, and Nvidia's software edge gives it a front-row seat to this growth over the long term.

High-multiple stocks like this can display extreme volatility from year to year. But if you maintain an investing horizon of a decade or more, Nvidia shares can help you turn small amounts into millions of dollars through the magic of compound interest. Just remember: The AI revolution is a multi-decade story, and Nvidia's high upfront premium may take years to fully justify.

But buying high-quality companies with durable competitive advantages operating in long-term growth markets is rarely a poor decision. Just make sure your investing horizon is long enough to fully digest Nvidia's pricey upfront valuation.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $657,385!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $842,015!*

Now, it’s worth noting Stock Advisor’s total average return is 987% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

Nvidia's (NASDAQ: NVDA) management team delivered critical insights for investors to digest.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

*Stock prices used were the afternoon prices of May 30, 2025. The video was published on June 1, 2025.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $657,385!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $842,015!*

Now, it’s worth noting Stock Advisor’s total average return is 987% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Parkev Tatevosian, CFA has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Nvidia (NASDAQ: NVDA) demonstrated excellent performance during a quarter that included significant headwinds.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

*Stock prices used were the afternoon prices of May 29, 2025. The video was published on May 31, 2025.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $828,224!*

Now, it’s worth noting Stock Advisor’s total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Parkev Tatevosian, CFA has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Warren Buffett has proven his ability to deliver market-beating gains, and thanks to this, build wealth over the years. The billionaire investor, at the helm of Berkshire Hathaway, posted a 19.9% compounded annual increase over nearly 60 years -- and that's as the S&P 500 index recorded a 10.4% such gain. All of this helped his portfolio reach $258 billion as of the closing of the most recent quarter.

Though Buffett's biggest holding is Apple, the billionaire generally doesn't invest in technology stocks, so you might not think of turning to this top investor for inspiration when shopping for artificial intelligence (AI) players. But here's some good news: We actually can use some of Buffett's investing principles to identify smart buys in any industry.

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Here, I'll consider two elements that consistently drive Buffett's investment decisions, and these are valuation and competitive advantage. He aims to get in on stocks at a cheap or reasonable level, and he favors stocks that have what it takes to stay ahead of rivals over time. Let's check out two Buffett-style AI stocks that are winning in both of these areas -- and could build long-term wealth.

1. Alphabet

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is a company that you probably have some interaction with on a daily basis. The company owns Google Search, the world's most popular search engine with about 90% market share -- and this business has driven Alphabet's revenue and net income into the billions of dollars. This is the result of advertisers paying to promote their products and services across the Google platform in order to reach us.

This search business has a solid moat, or competitive advantage, thanks to its performance and position as part of our daily routine -- when we don't know something, we don't just search for it, we "Google it." So, as long as Google Search continues to offer us the performance we expect, it's likely to maintain its leadership.

And here's how Alphabet is ensuring that happens: The company has invested heavily in AI, even developing its own large language model (LLM), Gemini, to improve and expand the capabilities of Google Search. This should please users, and as a result, keep advertisers coming back and potentially even spending more.

On top of this, the AI investment is helping Alphabet's Google Cloud business deliver double-digit revenue gains quarter after quarter. Google Cloud sells various AI products and services to customers, and demand is high as the AI boom continues.

Along with this solid competitive advantage, Alphabet offers a valuation that might even please the bargain-hunting Buffett. Alphabet, trading for 18x forward earnings estimates, is the cheapest of the Magnificent Seven tech stocks by this measure.

2. Nvidia

Nvidia (NASDAQ: NVDA) is clearly on every AI investor's radar screen. The company dominates the AI chip market, and this has helped it generate soaring earnings over the past few years -- with revenue and profit reaching record levels. But this stock doesn't look like it's in a bubble ready to burst. The company's solid reputation for excellence, along with its commitment to innovation, represents a moat. Nvidia aims to launch new AI chip updates on an annual basis, offering rivals little room to jump ahead.

And here's something else Buffett would like: the quality of Nvidia's leadership. Jensen Huang founded Nvidia more than 30 years ago and has successfully guided the company ever since. He's known for his resourcefulness, rapidly finding solutions to problems, and commitment to keeping Nvidia ahead of the pack.

Strong management is crucial for a company's long-term success, and Buffett has recognized the importance of this to him. "When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever," he wrote in his 1988 letter to shareholders.

Now, let's look at valuation. Nvidia isn't the cheapest AI stock around, but after recent declines across the sector, valuation has come down -- and today, it's at a very reasonable level considering the company's AI prospects. The stock trades for 31x forward earnings estimates, down from 50x earlier this year.

So, right now, Nvidia's moat, leadership, and reasonable price make it a Buffett-style stock that could help investors build significant wealth over the long term.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $828,224!*

Now, it’s worth noting Stock Advisor’s total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, Berkshire Hathaway, and Nvidia. The Motley Fool has a disclosure policy.

During the past five years, MicroStrategy (NASDAQ: MSTR) stock is up almost 2,900%. No other company even comes close. Nvidia, for example, is up a little more than 1,400% during that same time period.

What's particularly remarkable about the performance of MicroStrategy, which is now doing business as Strategy, is that it is based almost entirely on its relentless accumulation of Bitcoin (CRYPTO: BTC). The more Bitcoin Strategy buys, the higher its stock price goes.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

As a result, a number of companies are now jumping into the fray, attempting to become "the next Strategy" by embarking on Bitcoin buying campaigns. But do they even have a chance?

The rise of the Bitcoin treasury company

Strategy now holds 580,250 Bitcoins, making it by far the largest corporate holder of Bitcoin in the world. By way of comparison, the next largest corporate holder of Bitcoin is MARA Holdings (NASDAQ: MARA), a Bitcoin mining company, which holds 48,137 Bitcoins.

Strategy has gone all-in on its Bitcoin business model. In fact, in February, it rebranded itself as a Bitcoin treasury company. Essentially, this is a company that does nothing but buy Bitcoin. Even though Strategy still has a legacy enterprise software business, that's pretty much an afterthought these days.

If you go to the homepage for Strategy, it's hard even to find a mention of its software offerings. The entire website has been transformed into a Bitcoin dashboard.

Admittedly, the numbers are head-spinning. During the past 12 months, Strategy is up 139%. Bitcoin is up 53%. Gold is up 40%. Nvidia is up 22%. The only corporation that has even come close to Strategy's performance is Tesla, which is up 94%.

Potential rivals to Strategy

Potential Strategy rivals have a tall task ahead of themselves. They have to start buying Bitcoin at a hefty price of more than $100,000, and that requires a huge war chest. Strategy started its Bitcoin acquisition buying five years ago, when the price was much lower.

That said, there's one potential rival that's generating a lot of buzz these days, and that's Twenty One Capital. Most likely, you've never heard of the company, and for good reason. It only opened at the end of April, so it's only been around for a month.

In that brief time span, Twenty One Capital has managed to acquire 31,500 Bitcoins, making it the third-largest corporate holder of Bitcoin in the world. It has gone from zero to $500 million in 30 days.

You might be scratching your head here. If a single Bitcoin costs upward of $100,000, how did this company manage to snatch up 31,500 of these expensive coins in such a short period of time? The answer is simple: It has some friends with deep pockets.

Twenty One Capital launched with the support of Tether, the world's largest stablecoin, and SoftBank, the Japanese tech behemoth. It planning to go public with the help of Wall Street firm Cantor Fitzgerald, which had a SPAC (special purpose acquisition company) just waiting to be put to work.

There are more Bitcoin treasury companies on the way. For example, former presidential candidate Vivek Ramaswamy recently said he plans to convert one of his companies into a Bitcoin treasury company. Every day, it seems, there's a new company that's ditching its previous business model and going all in on becoming a Bitcoin treasury company.

What could possibly go wrong?

The Bitcoin treasury company playbook seems easy to follow: Buy Bitcoin, see your stock price soar. As long as the price of Bitcoin continues to go up, this could be a very profitable strategy. Things get dicier, however, if the price of Bitcoin ever falls. All of a sudden, any company holding Bitcoin on its balance sheet is going to have to take huge write-downs every quarter.

Moreover, the stakes continue to rise. As Bloomberg points out, in order to one-up Strategy, you need to do something new. It is no longer enough just to buy up as much Bitcoin as you can -- you now need to do something with it to create additional value. At a minimum, you need to outperform Bitcoin by at least a slight margin, otherwise investors will simply move their money into relatively safe spot Bitcoin exchange-traded funds (ETFs).

Should you buy Strategy?

If 2024 was the year that Bitcoin went mainstream, 2025 might be the year that the Bitcoin treasury company goes mainstream. I'm keeping a close eye on which new corporations are buying Bitcoin, as well as what their strategies are for outperforming Bitcoin over the long haul.

For now, Strategy is still the best option. You really can't argue with a company that is outperforming every single Magnificent Seven stock, and even Bitcoin itself. But, with the arrival of so many new Bitcoin treasury company copycats, it remains to be seen how much longer Strategy can remain the market leader.

Should you invest $1,000 in Strategy right now?

Before you buy stock in Strategy, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Strategy wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $828,224!*

Now, it’s worth noting Stock Advisor’s total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Dominic Basulto has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin, Nvidia, and Tesla. The Motley Fool has a disclosure policy.

Nvidia (NASDAQ: NVDA) reported quarterly financial results that pleased investors in the stock market.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

*Stock prices used were the afternoon prices of May 31, 2025. The video was published on June 2, 2025.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $828,224!*

Now, it’s worth noting Stock Advisor’s total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Parkev Tatevosian, CFA has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.