Think It's Too Late to Buy Nvidia (NVDA)? Here's the 1 Reason Why There's Still Time

Key Points

• Nvidia is in a league of its own as the only stock with a $4 trillion market cap.

• Its large clients are accelerating capital expenditures.

• Nvidia stock may not gain as quickly as it has over the past five years, but it should still reward shareholders.

• 10 stocks we like better than Nvidia ›

Nvidia (NASDAQ: NVDA) has made an incredible ascent to the top of the stock market, and it's in a league of its own as the only stock with a market cap above $4 trillion. It's up 1,300% over the past five years, and it doesn't look like it's anywhere near done.

Its growth prospects are up for debate amid increasing competition and its sheer size, which makes it harder to report high percentage growth. Still, there are many reasons to believe in Nvidia's future. Here's one reason investors still have time to buy Nvidia stock.

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Image source: Getty Images.

Hyperscalers are spending

There are several ways to envision Nvidia's opportunity, and one of them is to analyze how its largest clients are spending money on its products.

Nvidia works with the largest cloud operators in the world, the hyperscalers like Amazon, Microsoft, and Meta Platforms. These companies are building out their large language models (LLM) and offering top artificial intelligence (AI) solutions to their millions of customers, who in turn are using these platforms to create the next generation of generative AI apps.

This is the AI revolution that's changing how people do business, shop, pay, and more, and these hyperscalers need Nvidia's powerful chips to drive their AI models.

Just take a look at how much these three companies are spending this year on capital expenditures, and you can see how Nvidia's business is going to be a crucial part of this process for the foreseeable future. Amazon is spending at a run rate of $120 billion, Microsoft at $100 billion, and Meta at about $65 billion. These are accelerations from last year, and as companies require more power, those numbers are likely to keep going up. Nvidia doesn't collect every dollar of these sales, but it dominates this market.

I wouldn't bet on Nvidia offering the same kind of growth it has in the past over the next five years, but it's still likely to beat the market and offer value for shareholders.

Should you invest $1,000 in Nvidia right now?

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Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.