NVIDIA Corporation (NVDA) stands out as a leading candidate among S&P 500 stocks for immediate investment, fueled by robust AI-driven revenue growth and dominant market positioning. Its stock has appreciated over 120% year-to-date, contributing significantly to the S&P 500’s performance.
- NVIDIA's market cap exceeds $2.1 trillion as of December 2025.
- Q3 2025 revenue reached $39.3 billion, up 260% YoY.
- Data center revenue accounts for 87% of NVDA's total sales.
- NVDA's weight in the S&P 500 is 9.3%, the highest among all components.
- Forward P/E ratio stands at 48.7, reflecting high growth expectations.
- Projected CAGR of 45% in revenue over the next three years.
NVIDIA (NVDA) has solidified its role as a cornerstone of the S&P 500, with its market capitalization exceeding $2.1 trillion as of late December 2025. The company’s latest quarterly earnings revealed revenue of $39.3 billion, a 260% year-over-year increase, primarily driven by demand for its data center GPUs used in artificial intelligence applications. This growth has translated into a 42% increase in net income, reflecting strong operational leverage and pricing power. The stock’s performance has outpaced the broader S&P 500 index (SPX), which returned approximately 15% year-to-date. NVDA’s weight in the SPX reached 9.3% in December 2025, making it the most influential single stock in the index. Analysts note that its AI infrastructure ecosystem, including the Hopper and Blackwell architectures, continues to capture market share from competitors, with data center revenue accounting for 87% of total sales. Institutional ownership remains exceptionally high, with over 85% of shares held by mutual funds, ETFs, and hedge funds. Major U.S. and Asian tech firms have committed to long-term procurement agreements, signaling sustained demand. These dynamics suggest that NVDA is not only a growth stock but also a strategic asset in the ongoing AI transition. Investors are assessing NVDA’s valuation, with a forward P/E ratio of 48.7, elevated compared to the S&P 500 average of 22.5. However, the high multiple is supported by projected 45% compound annual revenue growth over the next three years. The stock’s continued rise could further boost the SPX, especially if other tech stocks follow suit.