We recently compiled a list of the 20 Most Profitable Stocks of the Last 20 Years. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against the other profitable stocks.
The stock market has a long history of generating wealth for investors. While past performance doesn’t guarantee future results, studying successful companies can provide valuable insights. By understanding the factors that drive these companies’ growth, we can potentially make better investment decisions in the future. It’s important to remember that investing involves risk, and conducting thorough research is crucial before making any investment decisions.
Investors frequently overlook revenue in favor of profitability when evaluating stocks. Profit is what’s left over after all costs are paid. Revenue is the total amount of goods and services sold. Because it is essential to determine if a business is a growth stock or a value one, profitability is important. To learn more about growth stocks, see 12 Best Growth Stocks to Buy and Hold in 2024. You can also discover some undervalued value stocks by reading 11 Oversold Value Stocks To Buy Now.
The U.S. stock market has seen several major events since 2000, including the dot-com boom and fall, the 2008 financial crisis, a tech boom with trillion-dollar values, and the 2020 pandemic crisis. The S&P’s broader market index produced double-digit yearly returns thirteen times between 2003 and 2023. This strong performance can be largely attributed to the phenomenal returns generated by technology stocks, which significantly boosted the overall return of the large-cap market.
According to a recent estimate, the aggregate market value of the top seven S&P 500 corporations is almost double that of the Japanese market. The head of topical research and global economics, Jim Reid, cautions that this is the most concentrated the US market has ever been.
As interest in growth stocks increases due to the hype surrounding AI and the prospect of rate cuts, these companies’ fortunes are expected to soar. To satisfy market demand, businesses are making significant investments in AI. AI’s impact on altering work patterns was highlighted by Satya Nadella du. According to them,:
“A growing body of evidence makes clear the role AI will play in transforming work. Our own research, as well as external studies, show as much as 70% improvement in productivity, using generative AI for specific work tasks.”
Our Methodology
To identify the most profitable stocks, we looked at the 20-year annualized returns of publicly traded companies in the US market from 2004 to 2024 and selected and ranked those with the highest 20-year annualized returns.
A close-up of a colorful high-end graphics card being plugged in to a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA)
20-Year Annualized Return: 39.81%
NVIDIA Corporation (NASDAQ:NVDA) tops the list for being one of the most profitable stocks over the past 20 years, delivering exceptional returns to investors. Bullish analysts are highly optimistic about NVIDIA’s future prospects. NVIDIA has recently achieved significant milestones across various sectors, particularly in AI and cloud computing. GeForce NOW, its cloud gaming platform, has reached over 30 million users and added popular games like “Resident Evil Village.” In AI, NVIDIA AI Enterprise has gained traction, helping businesses implement AI solutions. In the automotive sector, NVIDIA’s system-on-a-chip is deployed in NIO’s self-driving cars.
The NVIDIA Partner Network has expanded, recognizing 14 partners for AI achievements across industries. Additionally, NVIDIA leads in generative AI development, and five leaders were honored by the Silicon Valley YWCA for their contributions, underscoring the company’s leadership and diversity commitment.
NVIDIA Corporation (NASDAQ:NVDA) recorded revenue of $26.0 billion in Q1 2025, marking an impressive 262% surge year-over-year. The non-GAAP earnings per diluted share were $6.12, up 461% year-over-year. The stellar performance was largely driven by the Data Center segment, which reached a record $22.6 billion in revenue, up 23% quarter-over-quarter and 427% year-over-year. This growth was fueled by strong demand for NVIDIA’s Hopper-based GPUs, particularly for generative AI training and inference across cloud providers, consumer internet firms, enterprises, and other sectors. NVIDIA’s upcoming Blackwell platform, designed for trillion-parameter-scale generative AI, is anticipated to further accelerate data center revenue starting in Q4. Additionally, Networking revenue surged over triple digits year-over-year to $3.2 billion which was driven by increasing AI infrastructure needs.
In Q1 2024, there were 186 hedge fund holders in the company, up from 173 in the previous quarter. Citadel Investment Group held the largest position in the company with 207,354,000 shares worth $18,735,678,024.
NVIDIA stock holds a “Strong Buy” rating from 40 analysts. Among the 39 analysts providing 12-month price forecasts, the average target is $125.64, ranging from $62 to $200. This suggests a potential decrease of -2.06% from the current stock price of $128.28.
Overall NVDA ranks 1st on our list of the most profitable stocks of the last 20 years. You can visit 20 Most Profitable Stocks of the Last 20 Years to see the other profitable stocks that are on hedge funds’ radar. While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.