<div id="readability-page-1"><p><strong>Nvidia</strong> <span>(NVDA<span> -2.78%</span>)</span> has risen through the ranks to become the world's largest company when measured by market cap, and its astronomical rise has been a sight to behold. Despite the stock's blistering gains, many believe the best is yet to come. Nvidia has been one of the principal beneficiaries of the soaring adoption of artificial intelligence (AI), as its graphics processing units (GPUs) have become the gold standard for powering generative AI.</p> <p>Most experts agree that the adoption of AI is ongoing, but what does this mean for Nvidia investors? Is it too late to ride the AI gravy train, or has it already left the station?</p> <p>Let's look at the continuing opportunity and I'll make a bold prediction about where Nvidia stock <em>could</em> be by 2030.</p> <div><p><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MzIyMTYvYS1wZXJzb24tY29udGVtcGxhaW5nLWdyYXBocy1zaG93bi1vbi1zY3JlZW5zLWFjcm9zcy1tdWx0aXBsZS1tb2JpbGUtZGV2aWNlcy5qcGcmdz03MDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="466" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MzIyMTYvYS1wZXJzb24tY29udGVtcGxhaW5nLWdyYXBocy1zaG93bi1vbi1zY3JlZW5zLWFjcm9zcy1tdWx0aXBsZS1tb2JpbGUtZGV2aWNlcy5qcGcmdz03MDA"/></p><p>Image source: Getty Images.</p> </div> <h2>Enter the data center</h2> <p>Nvidia pioneered GPUs to render lifelike images in video games. The key factor to their success was parallel processing, which breaks down enormous computing tasks into smaller, more manageable chunks. This sped up the processing tremendously, revolutionizing the gaming industry. Nvidia quickly discovered that its GPUs could be harnessed to tackle other computationally intensive tasks, paving the way for machine learning (an earlier branch of AI), cryptocurrency mining, and even self-driving cars.</p> <p>However, it's data center spending that's fueling the AI revolution. Despite record outlays this year, 2026 could mark another year of record capital expenditures (capex) spending by the major cloud operators. In fact, the world's largest hyperscalers -- <strong>Microsoft</strong>, <strong>Meta Platforms</strong>, <strong>Alphabet</strong>, and <strong>Amazon</strong> -- which are also Nvidia's biggest customers, are expected to collectively spend $454 billion on capex in 2026, an increase of 26%, with the vast majority of that spending earmarked to support AI.</p> <p>Much of this additional spending will directly benefit Nvidia, which controls a 92% share of the data center GPU market, according to IoT Analytics. During its recent earnings call, CEO Jensen Huang suggested that its GPUs, semiconductors, accelerators, networking gear, and even full AI-supercomputers account for 58% (or more) of data center infrastructure spending. He went on the say that he expects data center spending of between $3 trillion and $4 trillion by 2030. Those estimates, if correct, have massive implications for Nvidia's future earnings potential, suggesting an addressable market of $1.74 trillion (or more) within the coming five years.</p>  <h2>Fun with numbers</h2> <p>While the numbers seem somewhat mind-boggling, there are some adjustments that will need to be made to bring any estimate closer to reality. For example, the specter of competition is ever-present, and some hyperscalers will use their own chips or those of Nvidia's rivals. Looking to the past can provide insight.</p> <p>Global data center spending in 2024 was estimated at $455 billion, according to market research firm Dell'Oro Group. Nvidia's data center revenue for its fiscal 2025 (ended Jan. 26) of $115 billion suggests the company captured roughly 25% of global data center spending for the year. Using $3 trillion (the low end of Huang's range) suggests Nvidia's data center revenue could soar to $750 billion, a more than sixfold increase in as many years.</p> <p>Nvidia boasts a market cap of roughly $4 trillion and has a forward price-to-sales (P/S) ratio of 20 as of this writing. Assuming its P/S remains constant, and <em>if</em> Nvidia were to generate $750 billion in revenue (that's a big if), its stock price could jump 265% to $608, pushing its market cap to $14.8 trillion.</p> <h2>The fine print</h2> <p>It's important to remember that this is all fun with numbers. A lot can happen in five years, and there's a litany of things that could go wrong, keeping Nvidia from reaching this lofty benchmark:</p> <ul> <li>The development of AI could stall, diminishing the need for Nvidia's data center GPUs.</li> <li>Someone could invent a better AI processor, and the GPU could lose its luster.</li> <li>The economy could hit a rough patch, causing businesses to rein in spending.</li> </ul> <p>There are more, but you get the picture. However, with the usual caveats out of the way, investors shouldn't miss the big picture. Nvidia's GPUs are the gold standard for AI and are being deployed in everything from robotics to self-driving cars. These chips are enabling advancements in healthcare and greater efficiency in manufacturing. This helps illustrate that even if Huang's projections don't come to pass, there's still plenty of growth ahead for Nvidia.</p> <p>And at just 26 times next year's earnings, I think Nvidia is attractively priced, particularly in light of the company's continuing opportunity.</p>                                                                            </div>

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<p>Nvidia, the world's largest company by market cap, is predicted to see significant growth in its stock price over the next five years, driven by the increasing adoption of AI and data center spending. With major cloud operators expected to spend $454 billion on capital expenditures in 2026, Nvidia could capture a substantial share of this market. If Nvidia's revenue reaches $750 billion, its stock price could rise by 265% to $608. However, potential risks include competition and economic downturns. Despite uncertainties, Nvidia remains well-positioned for growth in AI applications.</p>

- Nvidia has become the world's largest company by market cap, largely due to its dominance in the AI sector with its GPUs.  
- Major cloud operators are expected to spend $454 billion on capital expenditures in 2026, significantly benefiting Nvidia, which holds a 92% share of the data center GPU market.  
- Despite potential challenges, Nvidia's GPUs are crucial for various industries, suggesting continued growth and an attractive valuation for investors.

Prediction: This Will Be Nvidia's Stock Price 5 Years From Now