Chipmaker NVIDIA Corporation (NASDAQ:NVDA) has been on a tear recently- the firm’s share price rose nearly 10% over just the past 5 days, and 2017 saw NVDA stock turn in triple digit gains.

Of course, the old adage, ‘What goes up must come down’ is starting to weigh on investors’ minds following weeks of impressive growth, but Nvidia looks poised to spend 2018 the same way it did 2017- on an upward trajectory.

It’s not Intel

Many bears point to parallels between NVDA and Intel Corp (NASDAQ:INTC) back in the 90’s, saying that NVDA’s run to the top will end with slowing sales and a pullback in the share price. While it’s true that the two do bear some striking similarities, I don’t think that means NVDA stock is going to tank anytime soon.

Both NVDA and INTC saw their share price rise upwards of 1,000 percentage points over a five year period. However unlike INTC at the time of the dot.com boom, Nvidia doesn’t have all of its eggs in one basket. Therefore it looks as if it is much more likely to hold on to those gains. At the moment NVDA’s chips are being used in several markets that still have a ton of life left in them.

Part of the benefit of being an investor in NVDA stock is that you are gaining exposure to several different tech markets with impressive future potential. Nvidia chips can be found everywhere from the video game space to driverless cars and data centers.

That diversity means that Nvidia is able to avoid the cyclical trends that other chip makers struggle with. It also means that NVDA stock will likely continue to rise as long as growth in those markets continues.

Driverless Cars

If you haven’t already added a driverless car stock to your portfolio, you should do it now because the rapidly evolving industry is likely to be a game changer in the same way that the internet was a few decades ago. NVDA stock is one way to play that trend.

This week, Reuters reported that NVIDIA is partnering with Uber Technologies Inc. and Volkswagen AG (OTC:VLKAY) to develop chips capable of powering driverless technology. However those are just two of the firm’s 320 autonomous driving partners.

Nvidia has created artificial intelligence technology tailored for autonomous driving that allows the car to process sensor data inside and outside of the car. Many of the industry’s top dogs are using the technology, dubbed Nvidia Drive, already.

That’s a big deal because as autonomous driving comes further and further along, only a handful of chip makers will come out on top. Nvidia’s reach within the industry even at this early stage bodes well for the firm’s future.

Financial Powerhouse

The other thing that Nvidia has going for itself is impressive quarterly reports. The firm has been able to better analysts’ expectations consistently, which has kept the share price on a steady climb.

Last year we saw NVDA’s operating expenses rise by 24% as the company doubled down on R&D, however the firm’s revenue improved by 32% over the year, coming in at $2.64 billion and more than offsetting the expense increase. Not only that, but margins were up and earnings per share rose 60%.

The reason for the stellar financials are simple. Nvidia has found a business model that works and creates products that companies want. The firm’s position at the forefront of some of the fastest growing tech markets is only part of the equation. Nvidia also has a sound business model that should help to protect it from stalling growth.

Unlike many of its competitors, Nvidia outsources the production of its chips rather than building them in-house. That means that if for some reason demand were to trail off, Nvidia could cut down its orders to preserve margins.

The Bottom Line

NVDA stock certainly isn’t without risk. When you consider the firm’s impressive gains over the past few years, it is a little bit dizzying. However, the firm looks poised to ride this wave throughout 2018 as its core markets continue to grow rapidly.

There are a lot of worthy chipmakers out there, but Nvidia’s business model and ability to ingrain itself in emerging technology makes it a great play for long-term gains.

As of this writing, Laura Hoy did not hold a position in any of the aforementioned securities.