There’s a lot of disagreement about the continued adoption of artificial intelligence, but Nvidia continues to profit from this secular tailwind.
One Wall Street analyst believes that Nvidia’s market value will soar 369% in the next five years, and her logic is very convincing.
Nvidia’s valuation is compelling, especially given current expectations.
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While the adoption of artificial intelligence (AI) has fueled growth in the stock market in recent years, cracks appear to be appearing in investor confidence. Despite evidence to the contrary, worries about a bubble and worries about slowing growth have weighed on AI stocks.
Artificial Intelligence Chip Manufacturer NVIDIA(NASDAQ: NVDA) Just an example. The company quickly established itself as the gold standard by repurposing its graphics processing units (GPUs) to accelerate AI training and inference in the data center. Although the company’s relative Growth has slowed, but absolute demand remains enviable.
Just last month, a Wall Street analyst doubled his forecast for Nvidia stock, predicting the company would become a $20 trillion company by 2030. Let’s take a look at Nvidia’s recent performance, why this analyst is one of the company’s biggest bulls, and the path to achieving this lofty benchmark.
Image source: Getty Images.
No matter how you look at it, Nvidia’s performance over the past 10 years has been nothing short of impressive: revenue and net income soared 3,970% and 15,320%, respectively, pushing the stock price up 21,640% (as of this writing). As evidenced by the company’s recent results, unprecedented adoption of artificial intelligence has driven staggering demand over the past three years.
In the third quarter of fiscal 2026 (ended October 26), Nvidia’s performance accelerated again. Revenue reached a record $57 billion, a year-on-year increase of 62% and a month-on-month increase of 22%. Earnings per share (EPS) increased 67% to $1.30.
The data center segment continues to be a driver as it includes GPUs used in data centers and cloud computing, with sales jumping 66% to $51.2 billion, clearly demonstrating continued demand for artificial intelligence.
Nvidia’s forecast suggests the company’s growth momentum will continue. Management expects fourth-quarter revenue to reach $65 billion, which would be 66% year-over-year growth at the midpoint of its guidance.
Continued increases in capital expenditures (capex) by major technology companies appear to support Nvidia’s bullish view. AI spending was initially forecast at $250 billion in 2025, but is now at $405 billion and could conceivably be higher. Spending is estimated to be even higher in 2026.
According to IoT Analytics, Nvidia is the dominant player in data center GPUs, accounting for approximately 92% of the market share. As the gold standard for AI-centric GPUs, the company is well-positioned to ride the wave of rising AI capex.
Nvidia’s market capitalization is approximately $4.3 trillion (as of this writing). The company’s stock price would have to rise 369% to push its value to $20 trillion. According to Wall Street, Nvidia is on track to generate $213 billion in revenue in fiscal 2026, which ends in January, and has a forward price-to-sales (P/S) ratio of 20. Assuming its P/S remains constant, Nvidia would need to increase its revenue to about $1 trillion annually to support a $20 trillion market cap.
Wall Street expects Nvidia to post 31% annual revenue growth over the next five years. By my calculations, it would take 34% annual revenue growth by 2030 to reach $1 trillion, so it’s already in the ballpark. Additionally, Wall Street has historically underestimated the chipmaker, so I’m putting my money on Nvidia.
I’m not the only one who thinks so. Just last month, I/O Fund CEO and chief technology analyst Beth Kindig said double Her forecast for Nvidia’s market value in 2030 is $20 trillion. Her calculations are compelling: Kindig says Nvidia will grow data center revenue 36% annually over the next five years to achieve this benchmark: “This is supported by Nvidia’s aggressive 1-year product roadmap, an unbreakable software ecosystem built through CUDA [Compute Unified Device Architecture]and its development into a full-stack artificial intelligence system provider. When these elements are modeled together, coupled with the rapid expansion of global AI infrastructure capital spending, the path to $20 trillion becomes less sensational and more reflective of compound fundamentals. “
Kindig’s record is clear, so ignore her at your peril. In 2019, when Nvidia was valued at just $550 billion, analysts predicted it would grow by leaps and bounds apple Become the world’s most valuable company. Kindig’s prediction will come true in 2024, so I think her point carries considerable weight.
Nvidia stock has been volatile for a long time and is likely to continue to be so, so it’s not for the faint of heart.
Concerns about slowing artificial intelligence adoption and talk of a bubble have unnerved some shareholders, giving seasoned investors an opportunity to buy the stock at a relative discount. Nvidia’s current sales are just 23 times next year’s sales, even though its revenue is expected to grow 48% to $316 billion.
Even if Nvidia’s market cap doesn’t hit $20 trillion by 2030, there’s evidence the stock could be worth much more than it is now.
Before buying Nvidia stock, consider the following factors:
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Danny Vena, CPA, has worked at Apple and Nvidia. The Motley Fool holds positions and recommends Apple and Nvidia. The Motley Fool has a disclosure policy.
One Wall Street analyst predicts an unstoppable stock worth buying before soaring 369% Originally published by The Motley Fool
