Is NVIDIA Corporation (NVDA) The Best Stock to Buy According to Billionaire Ray Dalio?

In the ever-evolving world of tech stocks, one name that consistently stands out is NVIDIA Corporation (NVDA). With its dominant position in the AI and semiconductor industries, NVIDIA has become a darling of investors worldwide. But is it the best stock to buy according to billionaire Ray Dalio? Let's dive into the data and see if NVIDIA aligns with Dalio's investment philosophy.



First, let's look at NVIDIA's current financial performance and market position. As of March 23, 2025, NVIDIA's market cap is $2.89 trillion, making it one of the largest tech companies in the world. Its total revenue for the trailing twelve months (TTM) is $130.50 billion, with a net income of $72.88 billion. These figures indicate strong profitability and operational efficiency. NVIDIA's operating cash flow stands strong at five times its investing cash flow, indicating robust internal resource generation. Furthermore, the company’s return on equity (ROE) of 119.18% reflects efficient use of shareholder funds, driving shareholder value. The low debt-to-equity ratio of 0.13 suggests NVIDIA isn’t over-leveraged, a favorable point especially when navigating potential storms.



Now, let's compare NVIDIA's performance to other tech giants. Apple's market cap is $3.2 trillion, and Microsoft's market cap is $3.1 trillion. While NVIDIA trails behind these giants in terms of overall market valuation, its leadership in the AI and semiconductor industries positions it well to benefit from long-term trends. For instance, NVIDIA's Blackwell Ultra delivers up to 70x AI performance over Hopper, integrating 72 GPUs and 36 CPUs for real-time AI reasoning. This innovation positions NVIDIA as a key player in the AI era, which is a significant long-term trend.

However, NVIDIA also faces challenges and competition. For instance, Meta's move towards producing in-house AI chips could lessen their dependency on outside vendors like Nvidia, leading to a potential shift in business dynamics. Additionally, Amazon's aggressive pricing strategy for its AI chips presents a concerning challenge, as it could radically alter the market landscape. These competitive pressures highlight the importance of understanding the economic machine and identifying potential risks and opportunities.

In the context of Dalio's investment strategy, which emphasizes the importance of understanding the economic machine and identifying trends, NVIDIA's performance and market position offer several insights. Dalio's strategy involves investing in companies that are well-positioned to benefit from long-term trends, such as technological advancements and innovation. NVIDIA's leadership in AI and semiconductor technologies aligns with this strategy, as the company is at the forefront of developing technologies that are expected to drive future growth.

Additionally, NVIDIA's market share in the semiconductor industry is substantial. As of Q3 2024, NVIDIA holds a 42.46% market share, which is significantly higher than its competitors such as Advanced Micro Devices Inc (8.77%) and Intel Corporation (20.34%). This dominant market position suggests that NVIDIA is well-positioned to capture a significant portion of the growing demand for AI and semiconductor technologies.

In conclusion, NVIDIA's current financial performance and market position compare favorably to other tech giants, with strong profitability, operational efficiency, and a dominant market share in the semiconductor industry. In the context of Dalio's investment strategy, NVIDIA's leadership in AI and semiconductor technologies positions it well to benefit from long-term trends, making it an attractive investment opportunity. However, investors should also be aware of the competitive pressures and potential risks that NVIDIA faces.