£10,000 invested in Nvidia stock in 2020 would now be worth £244k! Here’s what could be next

Nvidia stock’s dominated the ‘picks and shovels’ market for artificial intelligence, but Dr James Fox believes it could be primed to dominate robotics too.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Nvidia (NASDAQ:NVDA) stock surged in 2024, becoming the world’s most valuable company — before losing the crown to Apple. However, the growth’s outstanding. In fact, a £10,000 investment in 2020 would now be worth £244k.

Analysts love this stock

Despite the incredible performance of the shares in 2024, analysts remain very bullish on Nvidia. There are currently 37 Buy ratings and three Hold ratings. The average price target’s $177, inferring the stock’s undervalued by around 20%.

This is further supported by a price-to-earnings-to-growth (PEG) ratio of 1.28, representing a 29% discount to the information technology sector average and a 34% discount to Nvidia’s five-year average PEG.

Should you invest £1,000 in NIO right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if NIO made the list?

See the 6 stocks

What comes after picks and shovels?

Picks and shovels is an investment strategy that sees investors buying the suppliers that fuel industries. In this case, investors flocked to Nvidia, with its graphics processing units (GPUs) deemed vital to the revolution in artificial intelligence (AI).

Investors will likely continue this strategy through 2025. Apple supplier Foxconn reported record sales on Monday 6 January, resulting in AI-focused stocks pushing higher still — Nvidia gained 3.4%, and that’s a big jump for a $3trn company.

However, AI’s already starting to improve efficiency around the world, driving productivity, margins and earnings. Companies like Swedish fintech Klarna stopped hiring humans last year and is instead using AI to do their jobs. This is the second phase of the AI revolution.

Ok, so what about Nvidia?

Well, Nvidia’s poised to dominate in the most exciting and productivity-enhancing segment of AI, and that’s robotics. The AI robotics market may represent the next massive leap for humankind, offering vast improvements in efficiency and productivity.

Unsurprisingly, Nvidia could surpass peers such as Tesla (yes, Tesla is big into robotics) in this sector. It’s got high-powered chips, it’s got large-scale foundation models, it’s got cash flow, and it’s got the Omniverse, a powerful simulation platform that enables the creation of high-fidelity digital twins for testing and experimentation.

Nvidia’s also taking a clever approach, partnering with several pure-play robotics companies like Figure AI, giving it the best chance of having a stake in the most successful humanoid robots of the future.

Expectations for the AI robotics sector vary greatly, with Goldman Sachs forecasting it could reach $38 billion by 2035. Meanwhile, Ark Invest takes an even more optimistic view, predicting a global revenue opportunity exceeding $24 trillion by the 2030s. I’d suggest the exploitation of robotics shouldn’t be underestimated.

The bottom line

Nvidia’s a powerhouse of the technology sector, and it’s more than just a chip designer. The AI ecosystem, developed over the last decade and more, positions it at the forefront of emerging technologies, and especially robotics. However, investors should certainly be wary that things can change quickly in the tech space. AMD’s hot on Nvidia’s heals and aims to take away some of the company’s dominance in the coming years. Nonetheless, it’s a stock I’m considering buying more of.

Should you buy NIO now?

Don’t make any big decisions yet.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — has revealed 5 Shares for the Future of Energy.

And he believes they could bring spectacular returns over the next decade.

Since the war in Ukraine, nations everywhere are scrambling for energy independence, he says. Meanwhile, they’re hellbent on achieving net zero emissions. No guarantees, but history shows...

When such enormous changes hit a big industry, informed investors can potentially get rich.

So, with his new report, Mark’s aiming to put more investors in this enviable position.

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

James Fox has positions in Nvidia. The Motley Fool UK has recommended Advanced Micro Devices, Apple, Nvidia, and Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

10% dividend yield! Here’s a FTSE 100 share to consider in April for passive income

This FTSE 100 stock just soared past the 10% yield mark, making it a potentially lucrative option for investors targeting…

Read more »

Young black woman using a mobile phone in a transport facility
Investing Articles

3 FTSE 100 safe haven stocks to consider as trade wars bite

I'm confident in the long-term outlook for the FTSE index of stocks. But these blue chips may protect investors from…

Read more »

Investing Articles

Here’s how Trump tariffs could hand us some top passive income bargains

As tariff terror grips the stock market, it's time for passive income investors to steel our nerves and look for…

Read more »

Investing Articles

These FTSE shares may offer some safety as Trump slaps tariffs on trading partners

FTSE shares moved lower on 3 April, after US President Donald Trump introduced hefty tariffs on its trading partners. These…

Read more »

Investing Articles

6.8% dividend yield! Consider these 2 ‘secret’ passive income stocks to target a £1,360 payday in 2025

Looking for ways to generate above-average dividend income? These lesser-bought income stocks are worth a close look.

Read more »

Elevated view over city of London skyline
Investing Articles

The M&G dividend yields over 10% — and could get higher!

Christopher Ruane explains why he's upbeat about the long-term outlook for the M&G dividend yield and would happily buy the…

Read more »

Young Caucasian man making doubtful face at camera
Investing Articles

2 popular UK growth stocks I wouldn’t touch with a bargepole in today’s market

Buying growth stocks can deliver market-beating returns, but this FTSE 250 pair doesn't look like a convincing investment for our…

Read more »

The flag of the United States of America flying in front of the Capitol building
Investing Articles

10 FTSE shares falling today after President Trump’s tariffs bombshell!

Our writer explains why JD Sports Fashion from the FTSE 100 and a diverse bunch of other UK stocks are…

Read more »