This Stock Quietly Outperformed Nvidia In 2025, and I Think It Will Keep Beating It

Interactive Brokers (NASDAQ: IBKR) has quietly outpaced one of the market's most talked-about winners in 2025. As of this writing, Interactive Brokers' stock has risen about 50% in 2025, beating AI (artificial intelligence) chipmaker Nvidia's (NASDAQ: NVDA) 42% gain.

That comparison is useful because it highlights something investors can miss when attention is concentrated in one corner of the market: You don't always need the hottest market darlings to earn market-beating returns. Interactive Brokers is doing it by compounding client accounts and scaling its low-cost online brokerage model.

But can Interactive Brokers continue to outperform Nvidia stock going forward?

I think so -- and here's why.

Image source: Getty Images.

Incredible momentum

Interactive is seeing strong growth in its business across essentially every key metric.

To get a glimpse of just how well the company is doing, just take a look at its third-quarter results. Attracted to Interactive Brokers' low-cost and highly automated platform with global market access, the online broker's customer accounts increased 32% year over year to 4.13 million last quarter. Even more, customer equity rose 40% to $757.5 billion. And total daily average revenue trades -- the company's count of customer orders per trading day that generated revenue for the company -- increased 34% to 3.62 million.

These customer metrics served as the backbone for a 23% year-over-year increase in commission revenue, resulting in total commission revenue for the period of $537 million. And the company's biggest revenue category, net interest income, rose 21% to $967 million. This was supported by stronger securities lending activity and higher average customer balances.

This robust growth in both customer metrics and revenue reflects Interactive Brokers' competitive advantages. The company is gaining market share due to its emphasis on automation, which is a byproduct of a deep-rooted culture at Interactive Brokers that prioritizes technology and financial discipline in its global expansion, ultimately enabling it to compete aggressively on pricing and earn unusually high profit margins. The company's third-quarter pre-tax profit was an extraordinary 79% -- up from 67% in the same quarter last year.

Risks to consider

Of course, trading activity can cool, and interest rates can fall. Both of these outcomes could weigh on Interactive Brokers' business. These are risks investors will have to keep a close eye on.

But an encouraging detail is that Interactive Brokers has been growing its net interest income through the recent cycle of interest rate cuts from the Federal Reserve. Even more, the key line item actually accelerated recently. In Q2, net interest income increased 9% year over year. But that growth rate accelerated to 21% in Q3.

An acceleration like this, of course, isn't sustainable if interest rates keep coming down. Still, the third-quarter results show how a growing client base and rising balances can offset some pressure on yields.

Another factor investors should consider is the stock's valuation. Trading at a price-to-earnings ratio of about 32, shares aren't exactly cheap. But given the impressive momentum across its key customer metrics, I believe the growth stock is likely to live up to its premium valuation over the long haul. Even more, I think it has a better chance of performing decently from this level than Nvidia does from its current valuation of 46 times earnings.

Both Interactive Brokers and Nvidia are subject to cyclicality. Interactive Brokers' revenue trends can be closely tied to trends in trading activity and shifts in interest rates, and Nvidia's business can ride the waves of investment cycles in graphics processing units (GPUs). But I personally believe the cyclical boom Nvidia is currently riding more closely resembles bubble-like euphoria that could quickly cool, while Interactive Brokers' tailwinds seem more sustainable.

Overall, I believe Interactive Brokers could not just outperform Nvidia this year, but over the next five years and beyond, too. But investors should be mindful of the risks, keeping any position in the stock small. Things can change quickly and dramatically in the financial industry -- and for online brokerages specifically. Investors, therefore, should treat any investment in Interactive Brokers like a high-risk investment.

Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Interactive Brokers Group and Nvidia. The Motley Fool recommends the following options: long January 2027 $43.75 calls on Interactive Brokers Group and short January 2027 $46.25 calls on Interactive Brokers Group. The Motley Fool has a disclosure policy.