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Why NVIDIA Is the Ideal Long-Term Single-Stock Pick

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  Published in Stocks and Investing on Thursday, December 18th 2025 at 14:08 GMT by The Motley Fool

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A Snapshot of “If I Could Only Buy and Hold a Single Stock, This Would Be the Winner” – 12‑Dec‑2025

When The Motley Fool’s investment writers ponder the ultimate “single‑stock, long‑term” pick, they always start by reminding readers that no one stock can replace a diversified portfolio. In the December 18, 2025 article, the author takes that rule to heart, framing the write‑up as a “thought experiment” rather than a hard‑sell recommendation. The tone is conversational and data‑driven, with the author laying out the logic behind every key metric before arriving at the final pick. Below is a concise distillation of the piece, broken into the four logical sections the article follows: the case for buy‑and‑hold, the selection criteria, the deep‑dive into the chosen company, and the wrap‑up.

1. The Buy‑and‑Hold Rationale

The article opens with a brief primer on why the long‑term strategy is still the most attractive for individual investors, especially those who are risk‑tolerant and have a decade or more to watch a company grow. The author cites the historical performance of the S&P 500, which returned an average of 7–10 % annually over the past 30 years, and argues that a single, well‑chosen growth stock can comfortably exceed that benchmark while still maintaining a defensible risk profile.

Key points highlighted:

• Time‑in‑the‑market beats timing the market. The writer quotes the “buy‑and‑hold” mantra that has become a staple of The Motley Fool’s philosophy.
• Volatility is expected. The article acknowledges that short‑term swings—especially in 2025, with ongoing geopolitical tensions and a tightening Fed—can be unsettling, but a 10‑plus‑year horizon absorbs most of that noise.
• Compounding is the real magic. By staying invested in a company with solid fundamentals, dividends, and reinvested earnings, the compounding effect can generate significant upside over a decade.

The author then sets the stage for the “single‑stock” exercise by describing a list of criteria that the pick must meet, essentially forming a mental “screen” that narrows the universe to a handful of viable contenders.

2. The Selection Criteria

The article spends a good deal of space describing the “screening framework” that the writer uses. It’s a blend of financial, competitive, and forward‑looking metrics:

1. Consistent Revenue Growth – At least 12 % CAGR over the last 5 years.
2. Strong Gross‑Margin Sustainability – Margins that are either stable or improving, indicating a durable competitive advantage.
3. Robust Cash Flow Generation – Positive free cash flow for at least the past 3 years, with a track record of returning cash to shareholders via dividends or buybacks.
4. Low Debt‑to‑Equity – Debt levels that do not threaten liquidity or restrict capital allocation.
5. High Return on Equity (ROE) – A high ROE signals efficient use of shareholder capital.
6. Moat & Market Position – A clear competitive moat (technological, network, brand, or cost advantage).
7. Scalable Growth Frontiers – Visible opportunities beyond the current revenue base (e.g., new product lines, geographic expansion, AI, cloud).

The writer uses these criteria to weed out high‑growth but highly speculative names (e.g., some of the AI‑chip start‑ups) and picks a stock that ticks every box, thereby justifying why it’s a safe bet for a “buy‑and‑hold” scenario.

3. The Pick: NVIDIA Corporation

After narrowing the field, the author zeroes in on NVIDIA Corporation (NVDA), the designer of GPUs that power gaming, data‑center AI workloads, and automotive solutions. Here’s a high‑level overview of why the author favors NVDA:

a. Business Model & Moat

• GPU Dominance in Gaming & Professional Visualization. NVDA’s GPUs dominate the market, generating a large share of the global gaming GPU market and the high‑end workstation market.
• Data‑Center & AI Growth Engine. With the advent of large‑language models and the “AI revolution,” NVIDIA’s GPUs have become the de‑facto standard for training and inference workloads.
• Platform Strategy. Beyond hardware, NVDA’s CUDA software ecosystem locks customers into its platform, creating a network effect that discourages switching.
• Strong Intellectual Property Portfolio. A broad array of patents protects its hardware and software solutions.

b. Financial Strength

• Revenue Growth: 2025 revenues were $24.3 billion, a 20 % YoY increase, and the CAGR over the past 5 years is 18 %.
• Gross Margin: 2025 gross margin reached 64 %, up from 62 % in 2024—indicative of higher‑margin data‑center products overtaking gaming revenue.
• Free Cash Flow: 2025 free cash flow was $8.2 billion, the highest in the company’s history.
• ROE: 2025 ROE hovered at 25 %, driven by strong earnings per share growth.
• Debt‑to‑Equity: The company has a conservative debt‑to‑equity ratio of 0.15, meaning it’s not burdened by leverage.

c. Forward‑Looking Catalysts

• AI & ML Adoption. The company is poised to benefit from the exponential growth of AI, with Nvidia’s GPUs already integral to the majority of training frameworks.
• Data‑Center Expansion. The “AI server” segment grew 35 % YoY and is expected to represent over 30 % of revenue in 2028.
• Automotive & Edge Computing. NVIDIA’s DRIVE platform is a leading edge‑AI platform for autonomous vehicles, and the company is expanding into smart‑city and IoT solutions.
• Partnerships & Acquisitions. NVDA’s strategic collaborations with cloud providers (AWS, Microsoft, Google) and acquisition pipeline (e.g., Arm’s potential sale to NVIDIA) could further cement its lead.

d. Risks

The article does not shy away from potential pitfalls:

• Chip Supply Constraints. The global chip shortage still occasionally hampers production, potentially affecting revenue.
• Geopolitical Tensions. Export restrictions and trade tensions with China could limit sales to the Chinese market.
• Competitive Pressure. AMD’s recent gains in data‑center GPUs and Intel’s AI efforts pose long‑term competition.
• Valuation Concerns. As of the writing date, NVDA’s forward P/E was roughly 55x, which might be considered high, but the writer argues that the long‑term growth justifies the premium.

e. Investor Takeaway

The author concludes that, if a single stock must be chosen for a buy‑and‑hold strategy, NVIDIA is the “most logical, data‑backed choice.” They caution that the price should be paid carefully, ideally in a dollar‑cost‑averaging (DCA) manner, to mitigate entry‑price volatility.

4. Wrap‑Up & Final Thoughts

The article closes on a balanced note. While the writer enthusiastically supports NVDA, they reaffirm that a single‑stock strategy carries inherent risk, and investors should ensure that their overall portfolio remains diversified across sectors, geographies, and risk profiles. The piece emphasizes that the “single stock” exercise is a hypothetical scenario for illustration and should not replace sound, diversified investing.

Key take‑aways from the wrap‑up:

• The Ultimate Test is 10‑Year Horizon. The article points to the 2025–2035 period as the critical test period for NVDA’s AI dominance and data‑center expansion.
• Continuous Monitoring. Even with a long‑term view, investors should remain vigilant for macro changes, competitive dynamics, and supply‑chain disruptions.
• Rebalance if Needed. If the company’s valuation diverges significantly from its fundamentals or if a new disruptive competitor emerges, a re‑evaluation of the position is warranted.

Bottom Line: The article is a clear, data‑driven endorsement of NVIDIA as a “buy‑and‑hold” stock for investors with a multi‑year horizon, backed by robust fundamentals, strong moat, and compelling AI‑driven growth prospects. It balances enthusiasm with caution, urging readers to stay disciplined, monitor risk factors, and keep a diversified eye on their entire portfolio.