Over the last few years, Nvidia (NASDAQ: NVDA) became the world’s largest publicly traded company thanks to its outstanding stock market performance. Nvidia’s stock has skyrocketed over the past five years 1354%.

What would that mean in terms of return on investment – and would it still be worth buying Nvidia stock for the first time now?

Serious wealth creator

Within five years, such a rapidly rising share price means an initial £5,000 purchase of Nvidia shares will now be worth close to £100,000.73,000.

I’m ignoring the impact of changing currency rates, but the fact that Nvidia is listed on the US stock exchange in dollars would have an impact on a UK investor. This would be quite tiny as the US dollar/pound exchange rate fluctuates by a few cents compared to the rate from five years ago. When investing in shares denominated in a foreign currency, it is always worth bearing in mind the exchange rate risk,

This raise from an investment of £5,000 five years ago to a valuation of close to £73,000 today is already a dream come true for investors. But wait – there’s more!

“more“I’m talking about is the dividend. With a yield of 0.02%, Nvidia is not a passive income powerhouse! Still, £5,000 invested at a lower share price five years ago should have yielded more and earned around £15 a year in dividends.

More excitingly, Nvidia is extremely profitable, so I think it has the potential to fund much higher dividends in the future.

Artificial intelligence has been a boon for Nvidia

So, given share price growth and dividend prospects, will Nvidia stock be a good choice for my portfolio right now?

Past performance is not necessarily an indication of what will happen in the future. This is worth remembering, although it may be tough given how well Nvidia stock has performed in recent years.

Much of this mighty performance reflects a surge in demand for chips that support companies’ increased employ of artificial intelligence.

Without this, Nvidia would still have a sizable business with other applications like gaming, but I don’t think that could justify its current market capitalization of $4.5 trillion.

Should I buy?

So as a potential investor, I ask myself a key question: what do I think will happen to AI demand?

I don’t know. We may only be in the early stages of the demand for artificial intelligence, which could drive Nvidia’s stock price higher in the coming years.

On the other hand, perhaps once the initial excitement wears off, demand for AI will plummet. Or maybe competitors will eat Nvidia’s breakfast by offering much cheaper chips. Nvidia’s proprietary designs, exceptional chip performance, and expertise give it some protection against this, but aren’t necessarily enough, especially for price-conscious customers.

I don’t think Nvidia’s current stock price, at 46 times earnings, gives me enough margin of safety against that risk.

So, although I like this business, I will not invest for now.