Where Will Nvidia Stock Be in 10 Years?

Investing for the long term is crucial for earning consistent profits in the stock market. However, as your investment period stretches beyond a few years into a decade or more, some additional risks surface. Over such an extended time, technology can evolve dramatically, and companies that were once leaders may struggle to remain relevant if they don’t make efforts to adapt.

Currently, it appears that tech giants such as Alphabet, Meta Platforms, and Apple might be falling behind in the AI competition. Although Nvidia (NVDA) has excelled up to this point, there’s no certainty that their success will persist.

Let’s dig deeper into what the next 10 years might hold for the company and its shareholders.

First, the near-term situation

The future of Nvidia largely hinges on its current state, and fortunately, things look promising for the short term.

This month, the Trump administration has indicated they will permit the resumption of sales for the company’s H20 AI chips in China, a decision made after earlier bans due to national security issues. This significant step forward is great news for the company.

Initially, Nvidia might be able to offset a significant portion of the $4.5 billion loss it incurred in the first quarter (due to excess H20 stock and contractual obligations) along with an anticipated $8 billion drop in H20 sales revenue for the second quarter.

From my perspective, the long-term consequences of this decision could hold significant weight. As Nvidia CEO Jensen Huang points out, engaging with Chinese clients might help thwart Huawei from monopolizing the world’s second-largest AI market with minimal competition. Indeed, his observation seems accurate.

As an ardent follower, I’d say it’s not just about the technical superiority of Nvidia’s chips that secures its economic advantage. Instead, they’ve meticulously constructed a developer community centered around their brand and CUDA platform. If Nvidia were to be banned from China, local competitors would seize this opportunity to establish their own AI chip ecosystem, which could potentially grow into a formidable challenge globally, beyond China. To stay competitive, Nvidia’s leadership is urging the Trump administration to continue allowing sales of advanced hardware in China.

What will the next 10 years have in store?

Essentially, Nvidia’s primary source of income comes from AI and data center hardware, accounting for an impressive 89% of its first-quarter earnings. But over time, the absence of diversification could expose the company to potential disruptions. As clients progress towards creating custom chip solutions, they aim to reduce their dependence on Nvidia’s costly hardware, which could pose a challenge.

Nvidia’s profit margin, exceeding 70%, indicates they significantly increase the price of their chips compared to what it costs to produce them. It might not sit well with customers that they have to pay such high prices.

Companies like Alphabet, Amazon, and OpenAI are currently pouring significant resources into custom-designed chips suited for their particular tasks. It’s reasonable to anticipate that Nvidia’s expansion in data centers and profit margins may slow down over time due to this development in the industry.

It appears that Nvidia’s strong expertise in hardware might enable them to shift towards emerging tech fields, with automation being a particularly promising area. In the first quarter, Nvidia’s automotive and robotics division reported a 73% increase in sales compared to the previous year, amounting to $567 million. Although this represents only a small portion of their total annual revenue ($44.1 billion), the business could expand significantly as self-driving cars and humanoid robots become more commonplace.

Nvidia is making efforts to establish a presence in quantum computing by establishing research facilities in Boston and Japan for studying this technology.

Is Nvidia stock a long-term buy?

From my vantage point, even with Nvidia’s current market capitalization of $4.1 trillion, the reopening of China’s market and possible shift towards innovative sectors like robotics and autonomous vehicles offer promising prospects for substantial growth in the coming decade. It goes without saying that no one wants to miss out on such potential opportunities.

As an ardent investor, I can’t help but notice the striking difference between Nvidia’s price-to-earnings (P/E) ratio of 55 and the average P/E ratio of the S&P 500 (^GSPC), which stands at a more modest 30. This suggests that Nvidia’s valuation has already factored in its success, implying that the days of its explosive, triple-digit annual growth rates might be numbered.

2025-07-24 10:15

First, the near-term situation

What will the next 10 years have in store?

Is Nvidia stock a long-term buy?

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