Should you invest $1,000 in Nvidia right now?

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Nvidia (NASDAQ: NVDA) stock is up 37% year-to-date as we approach the end of 2025. That's about double the S&P 500's total return this year, which is certainly an impressive gain. However, it's a significant slowdown from previous years -- 239% in 2023 and 172% in 2024. In fact, it has gained 1,260% over the past five years, including a painful period when it lost more than half of its total value in 2022.

Will that trend continue? And does it make sense to invest $1,000 in Nvidia stock today? 

The key to AI

Nvidia has had such an incredible run-up over the past few years because its graphics processing unit (GPU) chips are the most powerful chips to handle massive data loads for artificial intelligence (AI) creation. As hyperscalers build out huge AI businesses and develop data centers to generate the next wave of AI capabilities, Nvidia's chips have been in high demand.

The company continues to roll out new and more powerful products to drive all the new and exciting AI development, but competition is heating up, with companies like Advanced Micro Devices and even Alphabet scoring new, important deals for their chips.

Given Nvidia's central position in AI right now, it doesn't look like there's any near-term danger of losing its edge. It's natural that as the industry explodes, other companies are going to make strides and also take some market share.

Which means that, as much as we can anticipate future challenges, Nvidia is still going to be a good investment. Even if it doesn't deliver the same staggering gains it has in the past, investing $1,000 in Nvidia stock makes sense today.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.