Why Every Growth Investor Should Own the "Stock of the Decade" Dear Reader, The year is almost up. Therefore we are at the time when people begin to reflect on the previous year – what went right, what went wrong, etc. We’re almost at the midpoint of the decade, too. And this has me thinking about my time in this business, which has been over four decades now. Looking back, I’ve been blessed to have more than my fair share of winners. And that’s thanks in large part to Stock Grader (subscription required). It led me to Tyson Foods, Inc. (TSN), the original supplier of McDonald’s Corporation (MCD) for its Chicken McNuggets. Tyson was left with a lot of leftover “chicken parts” as the demand for McNuggets soared. So, the company decided to make its own “Chicken Chunks,” creating a monopoly out of a new way to eat chicken. Its operating margins expanded and created windfall earnings, and I made over 900% in the stock. Then, there’s Conair Corporation, a personal care company that specializes in hair products. Conair created a handheld hair-drying product in the early 1980s when “big hair” was the biggest fashion trend. As demand rose and people wanted bigger hair, the watts of hairdryers rose from 800 to 1,200, then to 1,800 and up. This fueled Conair’s explosion of earnings. Once competition came in a few years later, I decided to sell Conair and made over 1,000% in profits! Now, I can confidently tell you that most people are lucky to have one 1,000% gainer in their life. For a really good analyst? Maybe once a decade. So, how have I been able to pick out these huge winners before they really pop? Well, it’s quite simple really… some of the biggest winners of my career all had one thing in common… They all had monopolistic characteristics. In other words, they were so dominant, there were virtually no competitors. This is what led to their amazing returns. Given this, I think I know what the “Stock of the Decade” will be when the 2020s are over. I’m talking about NVIDIA Corporation (NVDA). In today’s Market 360, I’ll explain why. We’ll take a closer look at NVIDIA’s business and how I found the stock before the AI Boom started. I’ll also share why I expect the AI Boom to continue… and where to learn how you can profit from it. NVIDIA and the Dawn of the AI Boom NVIDIA is a leading computer graphics company that makes graphics processing units (GPUs). Originally, graphics were only prized by video game enthusiasts. But it turns out that the GPU has a wide range of powerful applications. They can be used to aid computers in applications like financial modeling, oil and gas exploration, virtual reality and even in self-driving cars. So, in the late 2010s, NVIDIA began receiving some unusual orders. Not only were crypto enthusiasts buying up high-end GPUs to mine cryptocurrency... but machine-learning researchers were also using the cards to train their models. It turns out that GPUs are really good for something called “parallelization.” This is where you break down a large computational task into smaller ones that can be calculated independently and simultaneously. That makes GPUs extremely powerful – far more than even the best central processing units (CPUs) in these types of computations. Data storage provider Pure Storage estimates that GPUs are roughly three times faster than an equivalent CPU for machine-learning algorithms. That is an enormous advantage in a world where large models can require months to train and cost millions of dollars. That put NVIDIA on the fast track to success. Thanks to its portfolio of valuable patents and internal research, NVIDIA got an enormous head start on the AI Boom. No company came close. Why I Recommended NVIDIA What originally got me excited about NVIDIA was what it was doing with the development of autonomous vehicles. My son was an engineering student at Stanford when they debuted an autonomous race car named “Shelley” that used NVIDIA chips. But in 2019, when I learned what it was planning to do with AI, I pulled the trigger and added it to my Growth Investor Buy List. Since then, the stock has been on a tear, and it’s now sitting on a whopping 3,300% gain!  The reason behind NVIDIA’s stunning growth? Its AI chips. Back in March 2022, NVIDIA unveiled the Hopper chip. It was a significant advancement in GPU technology, specifically designed to meet the growing demands of AI computing. So, it’s no surprise that roughly $19.4 billion of NVIDIA’s $26 billion in revenue from its most recent quarter can be attributed to Hopper. Then, before we knew it, ChatGPT launched in November of that same year, and the AI Boom took off. The rest, as they say, is history. To stay ahead of the competition, NVIDIA introduced Blackwell in March 2024. This is a brand-new GPU that is set to succeed Hopper. It is reportedly 2.5 times faster and 25 times more energy efficient. In other words, it’s a completely new game-changer. What sets the Blackwell GPU apart is that it is for generative AI, which is “machine learning.” The other AI chip competitors, like Intel Corporation (INTC) and Advanced Micro Devices (AMD), are not experts in machine learning. They are primarily developing chips for AI devices that optimize correlating data sets to learn preferences and habits rather than machine learning to solve problems and provide solutions. So, NVIDIA effectively has a monopoly. And as NVIDIA develops even more powerful GPU successors to Blackwell, I do not expect any competitor to “crack” NVIDIA’s dominance. I should also add that demand for Blackwell has been insatiable, with Big Tech names like Microsoft Corporation (MSFT) and Meta Platforms, Inc. (META) lining up to get all they can get their hands on. It’s reported that Blackwell is sold out for the next 12 months. So, once these new chips are in full production – and in peak demand – the company’s business is set to explode even further. This leads me right into why it is the stock of the decade… Why NVIDIA Is the Stock of the Decade Through the end of this decade, the transistors in each of NVIDIA’s chips will be approaching the “atomic” level, so sheer physics may prohibit it from making its chips any faster. So, looking beyond this decade, NVIDIA plans to utilize quantum computing. This is a form of computing that essentially utilizes ones AND zeroes to perform calculations instead of a 1 or 0, like traditional computing. Now, quantum computers have traditionally been cost-prohibitive except for government agencies and some universities. But I predict NVIDIA will help lead the charge to a breakthrough in this field in order to help speed up generative AI after its GPUs hit their physical limits. In fact, NVIDIA has a quantum cloud simulator up and running right now. The point is that NVIDIA is miles ahead of the competition. Now, I must disclose that NVIDIA is grossly overweighted in my portfolios. But I have no intention of selling this stock anytime in the next few years. Eventually, companies do lose their “edge.” Another more innovative company comes along with a better product and eats their lunch. But I don’t see that happening anytime soon with NVIDIA. To put it bluntly: I have never found a stock as monopolistic and as powerful as NVIDIA. Since the company is expected to dominate generative AI GPUs with virtually no competition in sight, I think it’s worth holding the stock through the end of the decade. And even after that, I expect NVIDIA to shift gears and then dominate quantum computing to further speed up generative AI. A New Wave of the AI Boom That being said, I predict that we’re going to see the AI Boom broaden out as we enter the second half of this decade. That’s because, within Donald Trump’s first days in office, he will issue a set of executive orders that will unleash a flurry of activity to help support the AI Boom. This second wave will be the new driving force of AI. And in a special presentation, I lay out a number of ways you can profit. Click here to learn how you can profit from the second wave of the AI Boom. Sincerely, | .png)
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