Nvidia (NASDAQ: NVDA) has emerged as one of the most valuable companies in the world, with its dominance in AI chips making it the centerpiece of Wall Street’s tech rally. But before you hit “buy,” it’s important to understand the opportunities, risks, and fundamentals driving the stock. Here are 10 key facts every investor should know.

1. Nvidia Is the Undisputed Leader in AI Chips

Nvidia controls more than 80% of the AI semiconductor market, thanks to its H100 and A100 GPUs. These chips are critical for training and running AI models like ChatGPT, image generators, and enterprise AI systems. Simply put: no other company comes close to Nvidia’s dominance in high-performance AI computing right now.

2. Data Center Revenue Is Its Growth Engine

Once known primarily for gaming GPUs, Nvidia’s data center division now brings in the majority of its revenue. Cloud providers like Microsoft Azure, Amazon Web Services, and Google Cloud buy Nvidia GPUs to run their AI workloads. In the last few quarters, this segment has grown triple digits year-over-year, making it the company’s primary growth driver.

3. Gaming Is Still Core to Its DNA

Despite the shift toward AI, gaming remains a crucial business. Nvidia’s GeForce GPUs are a household name among gamers, powering esports, high-performance PCs, and streaming platforms. Gaming provides consistent cash flow and brand recognition, giving Nvidia a reliable revenue base outside of AI.

4. Nvidia Benefits From Software, Not Just Hardware

Nvidia has built a sticky software ecosystem around its hardware. Its CUDA platform, along with AI frameworks like TensorRT, has created a developer “lock-in.” Once developers and enterprises build their systems around Nvidia’s tools, switching to a competitor becomes expensive and inefficient. This ecosystem is a big reason Nvidia’s moat is so wide.

5. Partnerships With Tech Giants Are Expanding

Nvidia chips are increasingly embedded in the world’s most important tech infrastructure. Tesla uses them for autonomous driving, Microsoft integrates them into Azure’s AI services, and Oracle and Meta have also made major purchases. These partnerships deepen Nvidia’s position across industries and create recurring, long-term demand.

6. Nvidia Is Highly Valued Compared to Peers

Investors need to know that Nvidia trades at a premium valuation. Its forward price-to-earnings ratio (P/E) is far higher than peers like AMD or Intel. The stock’s price reflects enormous future growth expectations, which means even small earnings disappointments could cause sharp pullbacks. This makes Nvidia both a high-growth opportunity and a high-risk investment.

7. Competition Is Rising Fast

Nvidia may be the leader today, but competitors are ramping up. AMD has gained traction with its MI300 AI chips, Intel is investing heavily in AI processors, and hyperscalers like Amazon and Google are developing their own custom AI chips. While Nvidia still dominates, increased competition could squeeze margins and reduce its pricing power over time.

8. Supply Chain Risks Still Exist

Nvidia relies on Taiwan Semiconductor Manufacturing Company (TSMC) for its chip production. This dependency is a double-edged sword: TSMC is the most advanced foundry in the world, but its location in Taiwan poses geopolitical risks. Rising tensions between the U.S. and China could threaten production or create supply chain disruptions.

9. Nvidia’s Founder Still Leads the Company

CEO Jensen Huang, who co-founded Nvidia in 1993, remains the company’s visionary leader. His bold bets on GPUs for gaming, AI, and data centers have shaped Nvidia’s success. Many investors view Huang as a key asset, but it also means Nvidia’s future is closely tied to his leadership and decision-making.

10. Stock Splits & Retail Interest Are High

Nvidia has split its stock multiple times (most recently in 2021), making shares more accessible to retail investors. The stock has become a favorite on platforms like Robinhood, driving high liquidity but also greater volatility. Retail enthusiasm often amplifies both rallies and sell-offs.

Investor Takeaway

Nvidia is not just a semiconductor company—it’s the engine powering the AI revolution. With dominance in AI, a strong ecosystem, and deep partnerships, it offers unmatched growth potential. But investors should be mindful of its lofty valuation, growing competition, and geopolitical risks. For long-term investors who can handle volatility, Nvidia remains one of the most compelling—but risky—growth stories of our time.