We recently compiled a list of the 20 High Growth Mega Cap Stocks You Can Buy And Hold For Next 5 Years. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against the other high growth mega cap stocks.
Exactly 5 years ago, the world struggled to deal with a black swan event: the COVID-19 pandemic. There was so much uncertainty that people didn’t even know if they’d be alive in the next few weeks, let alone figure out where the market was heading. Anyone who invested in the S&P 5 years ago would have gained 83%. If you had bought at the exact bottom, you’d have gained twice that amount.
What the above proves is that the present isn’t necessarily an indicator of what the future holds. All companies that had their workflows disrupted have recovered, some more than others. Some companies have strengthened their supply chains. Others have improved their work-from-home capabilities. Industries like airlines and restaurants have modified their business models to cater to the new dynamics.
These companies have been able to deal with the changing dynamics because of their financial strength and innovation. A company’s past performance and its finances give a good idea of whether it will be able to survive bad times. That’s why when we look at the best mega-cap stocks to hold for the next 5 years, we look at how well they have grown in the last 5 years.
To come up with our list of top 20 mega-cap stocks to hold for the next 5 years, we considered stocks with a market cap of at least $200 billion and a 5-year sales growth rate of at least 10%.
A close-up of a colorful high-end graphics card being plugged in to a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA)
NVIDIA Corporation (NASDAQ:NVDA) is a compute & networking and graphics solutions provider that operates through the graphics and compute & networking segments. It supplies its products to system integrators and distributors, consumer internet companies, distributors, original equipment manufacturers, and others.
The emergence of SeepSeek AI forced people to question Nvidia’s expensive technologies and whether they were really needed. There was a moment when everyone thought the huge investments in nuclear energy and GPUs would go to waste if AI models could be trained cheaply. However, Nvidia’s innovation, ecosystem, and financial strength, together with the support of a strong US government that seems determined to win the AI race against China should be enough to negate the doubters.
The short-term effects of DeepSeek may be forgotten as soon as 26th February when the company announces its earnings. Long-term investors should, however, keep an eye on how Broadcom and Marvell progress, two companies that make custom GPUs that are more attractive for hyperscalers to perform their repetitive and high-performance AI training requirements.
Overall NVDA ranks 1st on our list of the high growth mega cap stocks you can buy and hold for the next 5 years. While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that some 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 as promising as 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 was originally published at Insider Monkey.
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