It's no secret that Nvidia (NASDAQ: NVDA) had one of the strongest years of any stock in the market in 2023. With many companies ramping up their purchases of its class-leading graphics processing units (GPUs) for developing artificial intelligence (AI), Nvidia's revenue shot through the roof. That boom is far from over, and the stock has already responded to the sales jump incredibly.

In 2023, the stock rose nearly 240%. That's a magnificent return, but what would have happened if you had held Nvidia for slightly longer than that -- say, starting in 2020? Well, the results and lessons learned might surprise you.

The first thing to understand about Nvidia's business is that it is cyclical. Its GPUs are used to run arduous workloads like gaming graphics, engineering simulations, drug discovery, cryptocurrency mining, and creating AI models. The business booms when consumers are flush with cash and companies are willing to invest in their computing capabilities.

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Source Fool.com