The Motley Fool·2025-05-19 08:12Core Insights - Artificial intelligence (AI) is emerging as the next major technology platform, with significant investments from big tech companies into data centers to support AI computing needs [1] - Nvidia has become the primary beneficiary of the AI boom, with its GPUs experiencing high demand and limited supply, solidifying its market dominance in data center GPUs [2] Nvidia's Market Position - Nvidia's GPUs have seen soaring sales since the launch of ChatGPT, and the company has a long history of innovation, including the development of the CUDA programming language [2] - Despite substantial returns for early investors, there are questions about whether Nvidia's stock remains a good investment [3] Historical Comparison with Apple - In 2012, Apple was valued at $517 billion and had a P/E ratio of 13.5, which was lower than the S&P 500's P/E of 15.9, indicating that investors underestimated Apple's growth potential [4][5][6] - Apple's market cap has since increased to around $3 trillion, with stock price growth nearly 1,000%, driven by both business growth and multiple expansions [6] Lessons for Nvidia - The trajectory of Apple suggests that investors often underestimate the growth potential of leading companies and emerging technologies [7][8] - Nvidia's current P/E ratio of 45 and forward P/E of 31 may appear high, but it is still cheaper than many slow-growth stocks, with expected revenue growth of 53% this year and 24% next year [9][10] Future Outlook - While Nvidia may not replicate Apple's tenfold growth, there is a strong argument that the growth potential in AI is being underestimated, positioning Nvidia as a likely winner in the next five to ten years [11]