Artificial intelligence (AI) has made an undeniable impact on the technology landscape in recent years. Over the past few months, fears that growth will slow have fueled the popular narrative that the AI fruit is being reaped. But the truth is much more nuanced.
artificial intelligence chip manufacturer Nvidia(NASDAQ:NVDA) is the prime example of this. The company is a leading supplier of data center graphics processing units (GPUs) that power AI models and underpin both AI training and inference. Although the company’s relative growth has slowed, absolute Demand for these AI-centric chips remains strong.
Investors are climbing the wall of worry, but the stock remains very close to its all-time high. Let’s look at the company’s track record, the remaining opportunity, and what Nvidia needs to do to reach the $10 trillion market cap.
Image source: Getty Images.
Over the past decade, Nvidia’s revenue increased by 3,480% while its net income increased by 10,640%. This performance, combined with its early position in the AI revolution, resulted in a significant 26,000% increase in its stock price. But these amazing results are not part of a dusty past.
The company’s latest results help provide much-needed context. In the second quarter of fiscal 2026 (ended July 27), Nvidia’s results continued to accelerate, albeit at a more moderate pace. It generated record revenue of $46.7 billion, up 56% annually and 17% sequentially. As a result, earnings per share (EPS) rose 61% to $1.08. The data center segment, which includes chips used for data centers, cloud computing and artificial intelligence, saw sales increase 73% to $39 billion, driven by continued demand for artificial intelligence.
Management’s forecast indicates that the growth spurt will continue. For the third quarter, Nvidia’s forecast calls for revenue of $54 billion, which would result in 54% year-over-year growth at the midpoint of its guidance.
Estimates of the size of the opportunity cover a wide range. Generative AI market expected to reach $7 trillion by 2030 Goldman Sachs Research. Big Four accounting firm PricewaterhouseCoopers (PwC) is thinking much bigger, calculating that artificial intelligence could add $15.7 trillion to the global economy by 2030. The disparity in these estimates illustrates an important point: Experts agree the opportunity is huge, but no one knows Definitely How big actually is.
According to IoT Analytics, Nvidia is the leading supplier of data center GPUs with an estimated 92% of the market; therefore, it appears to gain the most from the continued adoption of AI.
Nvidia currently has a market cap of roughly $4.4 trillion (as of this writing). This means the stock price would have to rise 126% to increase its value to $10 trillion. According to Wall Street, Nvidia is on track to generate roughly $206 billion in revenue for fiscal 2026, giving it a forward price-to-sales (P/S) ratio of 21. Assuming P/S remains constant, Nvidia would need to grow revenue to around $467 billion annually to support its $10 trillion market cap.
Wall Street predicts Nvidia’s annual revenue growth will be 26.2% over the next five years. If the company can achieve this growth rate, it could be We will reach a market value of $10 trillion as early as 2030. Given Nvidia’s tendency to beat Wall Street’s expectations, recorded He says he will cross this threshold even sooner.
Don’t take my word for it on this one. Beth Kindig, CEO and chief technology analyst at I/O Fund, came to the same conclusion (emphasis mine):
We believe Nvidia will reach $10 trillion market value by 2030 or sooner impenetrable moat from CUDA through a rapid product roadmap [Compute Unified Device Architecture] as it is an AI systems company that provides components well beyond GPUs, including software platform and networking and software platforms.
Considering the recent advances in artificial intelligence and its rapid development, I think Kindig is right.
It is important to remember that even if the company: to be Once you reach this historic milestone, the path to success will not be a straight line and there are bound to be ups and downs along the way.
Bears will point to Nvidia’s valuation, as the stock is currently selling for 51 times trailing 12-month sales. I would argue that the price-to-earnings (P/E) ratio is ill-equipped to evaluate high-growth stocks like Nvidia. Using the more appropriate price/earnings-to-growth (PEG) ratio gives a multiple of 0.8 when any number less than 1 is standard for an undervalued stock.
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Danny Vena They have positions in Nvidia. The Motley Fool has positions in and recommends Goldman Sachs Group and Nvidia. The Motley Fool has a feature disclosure policy.
