I own many different stocks in my investment portfolio. And that’s unlikely to change any time soon.
That said, I often like to think about what stock I would hold onto if I could only own one for the next 10 years. This forces me to focus on my best investment ideas.
Recently, I was giving some thought to this hypothetical scenario. And here’s the stock I came up with.
A stock for the next decade
If I could only hold one stock for the next decade, I’d go for Nvidia (NASDAQ: NVDA). It’s a US-listed technology company that specialises in high-powered computing hardware (graphics processing units, or GPUs).
It has been a great investment over the long term, but I think this company is just getting started.
Why I’m bullish
I see Nvidia as a top stock to own for the long term for a number of reasons.
One is that it’s enjoying strong revenue growth on the back of the expanding data centre industry (where its chips help accelerate computing processing). Last fiscal year (ended 30 January), its revenue here rose 41% to a record $15.01bn.
According to Grand View Research, the global data centre accelerator market is set to grow by around 22% a year between now and 2030. So there should be plenty of growth to come from this side of the business.
Another reason I’m bullish is that the company looks set to benefit from the growth of the metaverse. As a provider of powerful graphics processing units, it is likely to be a key ‘enabler’ of this new version of the internet. It’s worth noting that Nvidia is creating its own version of the metaverse – the Omniverse.
Nvidia is the key to the metaverse.
Investment firm GLG
One of the biggest players in AI
What really excites me about Nvidia however, is the growth potential in artificial intelligence (AI).
AI requires an immense amount of computing power. It’s really not possible to run AI applications on underpowered computer chips. This is where Nvidia comes in. It designs high-powered products specifically for AI applications. These are used by the likes of Google, Microsoft, OpenAI, and Meta. Currently, it has an 80% market share in the AI-related GPU space.
According to Research and Markets, the AI chip market will be worth over $300bn by 2030, compared to just $21bn in 2021. So I reckon Nvidia is set to generate huge growth here in the next 10 years.
Overall, the outlook looks very exciting. As CNBC’s Josh Brown recently said: “This is the kind of company that has the future in a chokehold.”
Long-term potential
Now I’ll point out that Nvidia is a volatile stock. It’s also quite expensive from a valuation perspective.
So while I expect its share price to be much higher in 10 years’ time, I don’t expect it to rise in a linear fashion. I have no doubt that there will be plenty of volatility along the way.
I’m comfortable with share price swings though. Sometimes, the biggest long-term gains come from higher-risk stocks that are volatile in nature.
