Money Research Collective’s editorial team solely created this content. Opinions are their own, but compensation and in-depth research determine where and how companies may appear. Many featured companies advertise with us. How we make money.
Nvidia Just Became the First Company Worth $4 Trillion. Here’s How to Invest
By Jordan Chussler MONEY RESEARCH COLLECTIVE
Here’s how investors can own it.
***Money is not a client of any investment adviser featured on this page. The information provided on this page is for educational purposes only and is not intended as investment advice. Money does not offer advisory services.***
On Wednesday, Nvidia (NVDA) became the first publicly traded company to achieve a $4 trillion market capitalization, just 24 trading days after joining the $3 trillion club in June, alongside Apple (AAPL) and Microsoft (MSFT).
The surge in valuation for the leader of the semiconductor industry has mirrored the explosive adoption of AI — a technology that is highly reliant upon Nvidia’s products. Nvidia’s chips, graphics cards and software, which are designed to both train and operate AI programs, are integral to other Magnificent Seven companies’ AI ambitions. Among Nvidia’s clientele are Alphabet (GOOGL), Amazon (AMZN), Meta Platforms (META), Microsoft and Tesla (TSLA).
As demand for its products has skyrocketed, so too have its shares. Five years ago, NVDA was trading for $10.48. At press time, the stock is trading for $162.98, or 1,455.15% higher than in July 2020. So far this year, NVDA is up 17.80%, outpacing the S&P 500’s year-to-date gain of 6.40%.
NVDA stock outlook remains bullish
Despite those enormous gains, Wall Street analysts remain bullish on the market’s AI darling. Nvidia receives a consensus “Strong Buy” rating from the 40 analysts covering the stock, with 35 assigning it a “Buy” rating, four assigning it a “Hold” rating and just one assigning it a “Sell” rating.
Of course, Wall Street doesn’t have a crystal ball. Nor does AI, for that matter. While Nvidia’s outlook remains strong, it isn’t impervious to volatility. From its then-year-to-date high on Jan. 6 through its year-to-date, or YTD, low on April 4, the stock lost nearly 37%. Since that YTD low, the stock is up 72.75%.
Nonetheless, forecasts for Nvidia remain optimistic, with the Wall Street Journal pinning a median, 12-month price target at $175, or 7.41% higher than where shares of NVDA are trading today.
How to gain exposure
Retail investors can follow institutional investors’ footsteps and own the stock. More than 65% of the company’s outstanding shares are held by institutions, including 2.2 billion shares by Vanguard, 1.9 billion by BlackRock and 1.0 billion by Fidelity Investments.
A safer way to gain exposure to the chipmaker is via weighted index funds. As the S&P 500’s largest company by market cap, Nvidia has a dominant weighting in a handful of broad-based, lower-risk exchange-traded funds, or ETFs, that carry reasonable expense ratios.
For instance, the Vanguard S&P 500 ETF (VOO) — the world’s largest ETF by assets under management, or AUM, with $688 billion — currently has NVDA as its second-largest holding, weighted at 6.60% (MSFT is its largest at 6.83%). The SPDR S&P 500 ETF Trust (SPY) — the second-largest ETF with $637 billion in AUM — features NVDA as its largest holding with a weighting of 7.40%.
Similarly, tech-focused ETFs allow investors to gain exposure to Nvidia without having to own shares of the company directly. NVDA accounts for 9.25% of the total portfolio of the Invesco NASDAQ 100 ETF (QQQM), for example.
An additional bonus of using ETFs to gain exposure to NVDA is that they often pay dividends with higher yields than the tech giants provide themselves. The three aforementioned funds currently yield 1.22%, 1.16% and 0.55%, respectively, all of which surpass Nvidia’s 0.02% dividend yield.
It's never too late to start investing
Earn an uncapped 1% match when you transfer or rollover a brokerage account, IRA or 401(k)*
- Invest in stocks, bonds, options, crypto and more
- Earn rebates on your options trades, including with our free active trading API
- Turn any idea into an investable index. Just enter a prompt, and put our AI to work
- Invest for retirement with a matching 1% bonus on your annual IRA contributions
- Earn 3.3% APY** on your cash with no fees.
Easy and automated investing, starting at $3 a month
-
Online banking that automatically saves and invests with no hidden fees
-
Earn bonus investments from thousands of top brands
- Expert-led, bite-sized courses to increase your financial knowledge
Get Up To $1,000 When You Open and Fund a New Brokerage Account With a Qualifying Deposit*
- No account minimums or maintenance fees*
- Invest in stocks, etfs, bonds, options and more
- Get investing insights from Morgan Stanley
- Available desktop trading platforms with customization options
Get up to $1,000 in stock when you open & fund a new Active Invest account1
- Buy & sell stocks with no commissions*
- Buy fractional shares starting at $5*
- Access to alternative investments, including commodities
A library of expert stock recommendations
- Two expert-selected stock picks each month
- Provides ETF allocation insights to balance your portfolio
- Access monthly rankings, 5‑year quant scores, detailed stock reports, and strategic “entry style” guidance
More from Money:
We Asked AI Which Stocks to Buy in July. Here’s What It Said
What Financial Advisors Are Telling America’s Richest People to Do With Their Money
Follow the Money? Here Are the Stocks Hedge Funds Bought and Sold in the First Quarter
Since joining Money in 2023 as an investment editor, Jordan has specialized in a wealth of finance topics, ranging from traditional equities (stocks, mutual funds and ETFs), income investment vehicles and alternative assets to retirement savings, debt-based fixed-income securities and commodities, with a specific focus on gold and other precious metals. He takes pride in combining his personal interests and professional experience in finance and education to help readers increase their financial literacy and make better investment choices. Jordan has worked in digital publishing for 17 years after graduating from Lynn University as a member of both the Kappa Delta Pi International Honor Society and the U.S. Achievement Academy's All-American Scholar Program. He previously served as managing editor of Weiss Ratings, where he worked alongside a team of investment writers, editors and analysts to produce educational finance content and daily, weekly and monthly market news alerts. As a contributing writer for BetterInvesting Magazine, Jordan covered topics focused on the fundamentals of investing, technical and fundamental analysis, mutual funds, debt securities, dividend investing, retirement savings strategies and passive income generation. His bylines can also be seen in Apple News, Money Crashers, The Charlotte Observer, Fort-Worth Star Telegram and a dozen other newspapers.