Why Nvidia Stock May Frustrate Some Growth Investors

Nvidia (NASDAQ: NVDA) is a stock rarely associated with frustration. As the dominant producer of artificial intelligence (AI) accelerators, it has turned into one of the most successful stocks in market history.

Nonetheless, growth investors have come to expect incredible returns from this stock over the long term. If looking for such returns, the chip stock could disappoint, and here's why.

Image source: Nvidia.

Putting Nvidia stock into perspective

To be clear, I'm not advocating selling Nvidia stock as it will likely continue to beat the market. Its revenue grew by 65% in fiscal 2026 (ended Jan. 25), an unheard-of feat for a company with a market cap of $4.6 trillion. Also, since it holds $63 billion in liquidity and dominates the AI chip market, more conservative investors may take a greater interest in the company.

However, for growth investors, the market cap is likely the problem. Since it is already the most valuable company in the world, it will probably fall victim to the law of large numbers, and its performance will move closer to the mean as it grows. If a growth investor hopes for a 10x return from this point, a $46 trillion market cap in the next several years seems like a pipe dream.

With its rapid growth, an eventual doubling to $9.2 trillion is likely. Still, stock growth could slow if its 37 price-to-earnings (P/E) ratio moves closer to the S&P 500 average of 29.

Why growth investors should stay the course with Nvidia anyway

The saving grace for Nvidia may be the aforementioned 65% annual revenue growth rate. Even among much smaller companies, few AI companies are generating that kind of growth, and even the ones that do face daunting challenges.

One of the few to grow faster at the moment is Micron Technology, whose market cap is about $476 billion. The company's revenue rose by 123% in the first half of fiscal 2026 (ended Feb. 26). Still, its history of brutal sell-offs when chip cycles turn negative may discourage some investors.

Additionally, CoreWeave has a market cap of $55 billion and reported a 168% revenue increase in 2025. Unfortunately, it continues to incur huge losses, and the massive capital expenditures (capex) required to meet demand for AI data center capacity have led to debt levels that have put the company at risk.

In comparison, investors have a much lower-risk growth scenario with Nvidia. The consensus 12-month price target on Nvidia is around $274 per share, an approximate 45% gain on the current share price.

In the end, it is likely true that Nvidia has become too large to be a get-you-rich stock. Still, Nvidia can make one significantly wealthier, and if investors can temper expectations, it should still be a no-brainer artificial intelligence stock, even for investors with high growth expectations.

Will Healy has positions in CoreWeave. The Motley Fool has positions in and recommends Micron Technology and Nvidia. The Motley Fool has a disclosure policy.