During adoption artificial intelligence (AI) Despite the developments that have fueled growth in the stock market in recent years, there appear to be cracks in investor confidence. Despite evidence to the contrary, bubble concerns and fears of slowing growth have weighed on AI stocks.
artificial intelligence chip manufacturer Nvidia(NASDAQ:NVDA) is an example. The company redesigned it graphics processing units (GPUs) to accelerate AI training and inference in data centers and quickly establish itself as the gold standard. While your company relative The growth rate has slowed down, absolute demand is still enviable.
Just last month, a Wall Street analyst doubled down on his expectations for Nvidia shares, predicting that the company would become a $20 trillion company by 2030. Now let’s look at Nvidia’s latest results, why the analyst is one of the company’s biggest bulls, and the path to hitting that lofty benchmark.
Image source: Getty Images.
No matter how you slice it, Nvidia’s results over the last 10 years are breathtaking: Revenue and net income have increased by 3,970% and 15,320% respectively, leading to a 21,640% increase in stock prices (as of this writing). The dramatic demand over the past three years has been fueled by unprecedented adoption of artificial intelligence, as the company’s latest results show.
In the third quarter of fiscal 2026 (ended October 26), Nvidia’s results accelerated once again. Record revenue of $57 billion was up 62% over last year and 22% sequentially, while earnings per share (EPS) of $1.30 were up 67%.
The data center segment continues to be a driving force as it includes GPUs used for data centers and cloud computing, with sales of $51.2 billion, up 66%, making it clear that there is continued demand for AI.
Nvidia’s forecast shows that the company’s growth path will continue. Management’s fourth-quarter outlook calls for revenue of $65 billion; This represents 66% year-on-year growth in the middle of its guidance.
Incessant upward revisions of capital expenditures (capex) by major tech companies appear to support Nvidia’s bullish view. Initial estimates for AI spending in 2025 were $250 billion, but it is now estimated at $405 billion and could possibly rise even higher. Forecasts show that spending will be even higher in 2026.
According to IoT Analytics, Nvidia is the dominant player in the data center GPU space, commanding an estimated 92% of the market. As the gold standard for AI-centric GPUs, the company is well positioned to ride the AI capex wave even higher.
Nvidia’s market cap stands at roughly $4.3 trillion (as of this writing). The company would need to achieve a 369% stock price increase to increase its value to $20 trillion. According to Wall Street, Nvidia is on track to generate $213 billion in revenue in fiscal 2026 (ending in January) and has a forward price-to-sales (P/S) ratio of 20. Assuming P/S remains constant, Nvidia will need to grow revenue to around $1 trillion per year to support its $20 trillion market cap.
Wall Street predicts Nvidia’s annual revenue will grow 31% over the next five years. According to my calculations, reaching $1 trillion in revenue by 2030 would require annual income growth of 34%, so that’s already there. Moreover, Wall Street has a history of underestimating the chip maker, which is why I’m putting my money on Nvidia.
I’m not the only one who thinks this way. Just last month, Beth Kindig, CEO and chief technology analyst at I/O Fund, doubled Nvidia’s 2030 market value expectation has increased to 20 trillion dollars. His calculations are compelling: Kindig said Nvidia will increase data center revenue by 36% annually over the next five years to hit this benchmark: “This is supported by Nvidia’s aggressive 1-year product roadmap, an impenetrable software ecosystem through CUDA [Compute Unified Device Architecture]and its evolution into a full-service AI systems provider. “When these elements are modeled together, alongside the rapid expansion in global AI infrastructure capital spending, the path to $20 trillion becomes less sensational and more a reflection of fundamental fundamentals.”
Kindig has a clear record, so ignore him at your peril. In 2019, when Nvidia’s market value was only $ 550 billion, analysts predicted that it would take a step ahead Apple To be the most valuable company in the world. Kindig’s prediction came true in 2024, so his thought is quite important in my opinion.
Nvidia shares have a long history of volatility and will likely continue, so it’s not for the faint of heart.
Fears that AI adoption will slow and talk of a bubble have rattled some shareholders and given savvy investors the opportunity to buy shares at a relative discount. Even though Nvidia is expected to grow its revenue 48% to $316 billion, it’s currently selling at just 23 times next year’s sales.
Even if Nvidia doesn’t reach a $20 trillion market cap by 2030, evidence suggests its stock will be much higher than it is today.
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