So, artificial intelligence. It’s everywhere, isn’t it? Seemingly popping up in everything from your toaster to, well, more complicated things. This naturally requires a lot of, shall we say, infrastructure. Taiwan Semiconductor Manufacturing, a name that doesn’t exactly roll off the tongue, is predicting a rather astonishing 50-to-55% annual growth in AI chip revenue through 2029. Fifty-five percent! That’s the sort of number that makes you double-check the decimal point. Cathie Wood, a name you’ll likely recognize if you’ve ventured near a financial news outlet, is forecasting a tripling of data center capital expenditures by 2030 – a cool $1.4 trillion. One begins to suspect they’re building the internet all over again, only this time with more blinking lights.
And right in the thick of it, leading the charge, is Nvidia. Now, Nvidia originally made its name building graphics cards for gamers – the sort of thing that lets you make explosions look convincingly, well, explosive. But they’ve cleverly pivoted, and now their GPUs – Graphics Processing Units – are the brains behind much of the AI boom. They currently command around 90% of the market, which, frankly, feels a bit like one company owning all the oxygen. They’ve also built a rather clever software platform called CUDA, and a strong networking business, which, as it turns out, is rather important when you’re trying to move vast quantities of data around. It’s a bit like building a superhighway for information, and Nvidia seems to have secured most of the toll booths.
Wood, that persistent forecaster, is particularly bullish on networking as a growth area. Which, again, is good news for Nvidia. Their networking revenue jumped an eye-watering 162% last quarter – to $8.2 billion. That’s a lot of bandwidth. Compare that to a 56% increase in compute revenue, and you begin to see where the real excitement is.
So, where does this leave us? Well, the question on everyone’s mind, naturally, is: what’s the stock going to look like in five years? Let’s attempt a little forecasting, a notoriously unreliable science, but let’s have a go anyway.
The Path to $800 (or Thereabouts)
Nvidia recently reported revenue of $213.4 billion for its fiscal year. If they can maintain a compound annual growth rate of 37.5% through 2031 – a rather ambitious target, admittedly – their revenue could reach around $1.4 trillion. This assumes a robust 50% growth next year, gradually tapering down to 25% in fiscal 2032. It’s a bit like trying to steer an ocean liner – you need a lot of initial thrust, and then a more measured approach.
Now, let’s do some back-of-the-envelope calculations. If operating expenses increase by an average of 7% per quarter, gross margins stay around 73%, and we factor in a 15% tax rate, Nvidia could generate over $792 billion in adjusted earnings by 2031. That translates to roughly $32.50 per share, given the current share count of 24.3 billion. Apply a forward price-to-earnings ratio of 20-to-25 – a fairly standard valuation metric – and you arrive at a share price range of $650 to $815 by the end of 2030. Of course, this is all based on a number of assumptions, and the future, as they say, is notoriously unpredictable. But it provides a reasonable, if tentative, outlook.
| Financial Metric | FY2027 | FY2028 | FY2029 | FY2030 | FY2031 | FY2032 |
|---|---|---|---|---|---|---|
| Revenue | $320 billion | $464 billion | $699 billion | $877 billion | $1.14 trillion | $1.42 trillion |
| Revenue growth | 50% | 45% | 40% | 35% | 30% | 25% |
| Gross profit | $234 billion | $339 billion | $474 billion | $640 billion | $832 billion | $1.04 trillion |
| Adjusted operating expenses | $28 billion | $37 billion | $48 billion | $63 billion | $83 billion | $109 billion |
| Operating income | $206 billion | $302 billion | $426 billion | $577 billion | $749 billion | $931 billion |
| Net income | $175 billion | $257 billion | $362 billion | $490 billion | $637 billion | $792 billion |
| Earnings per share | $7.19 | $10.56 | $14.90 | $20.18 | $26.21 | $32.58 |
Given this outlook, Nvidia remains a buy today. Though, of course, past performance is never a guarantee of future results. And the future, as anyone who’s ever tried to predict it will tell you, is a remarkably slippery thing.
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2026-01-30 23:54