Prediction: This is what will finally end Nvidia’s monster stock gains

Its Nvidiahis (NASDAQ: NVDA) world, investors just live in it. At least, that’s how it felt in 2023 and 2024. The chipmaker and leading provider of artificial intelligence (AI) computing infrastructure now has a market capitalization of more than $3 trillion, making it the third largest company from the world. Up nearly 3,000% over the past five years, it’s now one of the best-performing stocks ever, making longtime shareholders incredibly wealthy.

I predict this monstrous run is nearing its end. No, it has nothing to do with the company’s upcoming earnings release on August 28. But it’s dealing with a growing competitive set that could hurt Nvidia’s pricing power in the long run. Here’s why I think the monster gains in Nvidia stock will end in the next few years.

Nvidia’s operating income has grown more than 2,000% over the past five years to $48 billion. That growth came as Nvidia’s chips are the primary computing vehicle for the new AI tools taking over the tech sector. Being the only large-scale supplier of these premium chips and with a technological lead over competitors such as IntelNvidia has seen revenue and profit margins grow as it sells these scarce resources at sky-high prices.

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