Nvidia Has Turned Out to Be One of the Hottest Stocks

Nvidia has turned out to be one of the hottest stocks on the market in the past decade, as the company has delivered phenomenal gains of more than 19,700%

Investors who baublesover on April 15, 2015, to invest $5,100 in Nvidia (NASDAQ:NVDA) stock and had the patience to hold it for 10 years are now sitting on a phenomenal gain of 19,700%. To put that in perspective, the S&P 500 index has generated gains of 156% during this period.

Investors who baublesover on April 15, 2015, to invest $5,100 in Nvidia (NASDAQ:NVDA) stock and had the patience to hold it for 10 years are now sitting on a phenomenal gain of 19,700%. To put that in perspective, the S&P 500 index has generated gains of 156% during this period.

What this means is that an investment of $5,100 made in Nvidia a decade ago is now just over a million dollars.

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NVDA data by YCharts

Investors who had the foresight to put this much money into Nvidia 10 years ago and had the patience to hold the stock for such a long time are now sitting on handsome gains, becoming millionaires in the process.

The good part is that Nvidia still has a lot of catalysts that could send the stock higher in the coming decade. However, Nvidia is now the world's third-largest company with a market cap of $2.74 trillion, which is why it would be absurd for investors to expect it to repeat its past decade's performance in the future.

Of course, Nvidia can still fit into a diversified portfolio. But investors looking for stocks that could deliver bigger gains and help them construct a million-dollar portfolio, in the long run, would do well to take a closer look at two other companies that are at the beginning of a massive growth journey -- Broadcom (NASDAQ:AVGO) and Palantir Technologies (NASDAQ:PLTR).

Let's look at the reasons why these growth stocks could be worth buying as part of a million-dollar portfolio.

1. Broadcom

Nvidia is the dominant player in data center graphics processing units (GPUs), a market that has displayed stunning growth as these chips are capable of carrying out multiple calculations simultaneously because of their parallel computing ability. That's why major cloud computing giants flocked to Nvidia to buy its GPUs in a bid to quickly train and deploy artificial intelligence (AI) models.

However, the application-specific integrated circuits (ASICs) designed by Broadcom (NASDAQ:AVGO) are also gaining terrific traction among AI companies. ASICs are custom processors designed to perform specific tasks, which is why they can carry out those tasks at a greater speed with lower power consumption. As a result, major cloud computing and AI companies such as Microsoft, Alphabet, OpenAI, and Meta Platforms have been developing custom AI processors for their AI data centers.

This strong customer lineup has led to outstanding growth in demand for Broadcom's AI chips. The company's AI chip revenue shot up an impressive 220% in the previous fiscal year (which ended on Nov 3, 2024) to $12.2 billion. More importantly, Broadcom sees a serviceable addressable market (SAM) of $60 billion to $90 billion in the next three years based on the three cloud customers that have already deployed its chips.

That number is likely to get much bigger, considering that it is developing custom AI chips for an additional four customers. As a result, Broadcom's AI revenue could multiply significantly in the coming years from last year's levels. A key reason why that is likely to happen is the company's dominant position in ASICs, with its market share estimated to be between 55% and 60%, as per JPMorgan.

If Broadcom manages to maintain its control over half of the custom AI chip market after three years and the addressable market nears the higher end of its estimated range based on the three customers it currently has, its AI chip revenue could almost quadruple. This explains why analysts are upbeat about the company's potential growth going forward.

AVGO Revenue Estimates for Current Fiscal Year

Even better, Broadcom has a price/earnings-to-growth ratio (PEG ratio) of just 0.47 based on its projected earnings growth for the next five years, according to Yahoo! Finance. A PEG ratio of less than 1 means that a stock is undervalued after taking into account its long-term earnings growth potential. All this makes Broadcom an ideal fit for investors seeking the next big AI growth stock that could deliver robust gains in the long run.

2. Palantir Technologies

Palantir Technologies (NYSE:PLTR) stock has shot up an impressive 349% in the past year despite witnessing a sharp pullback of late amid the tariff-related turmoil. This outstanding rally in Palantir's stock is because of the rapidly growing demand for the company's AI software platform, which allows governments and businesses to integrate generative AI tools into their operations.

For instance, the North Atlantic Treaty Organization (NATO) has