Artificial intelligence (AI) has been a hot topic recently, with many experts believing its potential is vast and untapped. Innovative uses for this technology are sprouting up rapidly, and it’s already being utilized to simplify business operations, generate unique content, and boost efficiency. While we’ve only scratched the surface of AI adoption, it appears that major tech companies will keep investing heavily in its development.
Leading tech companies such as Amazon, Microsoft, Alphabet, and Meta Platforms intend to invest hundreds of billions of dollars in capital expenses (capex) in the year 2025 to fuel their artificial intelligence (AI) aspirations, and it seems this investment trend is likely to continue for some time.
It is anticipated that Nvidia (NVDA) will benefit greatly from increased spending in AI. Their graphics processing units (GPUs) are top-tier for training and operating AI models, which could potentially earn them a prestigious spot among companies worth over $10 trillion.
The start of something big
In 1999, Nvidia introduced the Graphics Processing Unit (GPU) primarily for generating lifelike graphics in video games. The key to achieving this was parallel processing, a technique that allows multiple mathematical calculations to be carried out concurrently. These chips divide large computational tasks and distribute them across numerous internal cores, which was groundbreaking at the time.
It was discovered that the same ability which made GPUs suitable for transferring data swiftly over the internet in cloud computing, as well as providing the computational muscle required to satisfy the stringent requirements of AI, has significantly boosted Nvidia’s financial performance and caused its stock price to skyrocket.
The same feature that made GPUs ideal for moving data quickly on the internet for cloud computing and meeting the tough demands of AI has led to improved financial results for Nvidia and a dramatic increase in its stock price.
The results are (still) compelling
Over the last ten years, Nvidia’s revenue has experienced an astronomical increase of 3,720%, and its net income has skyrocketed by an astounding 72,110%. This impressive growth, coupled with anticipation about artificial intelligence, has ignited a stunning climb in the company’s stock price, which has rocketed upwards by approximately 34,270%.
In the third quarter of its financial year 2026, which concluded on April 27, Nvidia reported an all-time high revenue of approximately $44 billion. This represented a 69% increase compared to the same period the previous year and a 12% growth when compared to the preceding quarter. This significant rise propelled an adjusted earnings per share (EPS) that rose by 33% to reach $0.81. The impressive performance was largely attributable to strong expansion within the data center segment, where sales skyrocketed by 73%, amounting to $39 billion. The surge in revenue for this segment was primarily fueled by persisting demand for artificial intelligence.
A significant expansion might be on the horizon for the generative AI sector, with Goldman Sachs Research predicting a potential market value of up to $7 trillion by 2030. Notably, Nvidia is responsible for providing the majority of the processors that fuel this technology’s advancement.
The path to $10 trillion
Currently, Nvidia’s market value stands at approximately 4.2 trillion dollars. To reach a market cap of 10 trillion dollars, the company needs a rise in stock price by about 138%. Analysts on Wall Street predict that Nvidia will likely generate around 200 billion dollars in revenue by fiscal year 2026, which translates to a forward price-to-sales (P/S) ratio of 21. If the P/S ratio remains consistent, Nvidia would need an annual revenue growth to about 475 billion dollars to sustain a market cap of 10 trillion dollars.
Over the next five years, analysts on Wall Street predict an annual revenue surge of approximately 22.3% for Nvidia. If the company successfully maintains this growth pace, it might attain a staggering market capitalization of $10 trillion as soon as 2030.
Instead of relying on my opinion, consider Beth Kindig’s prediction as well. As CEO and lead tech analyst for the I/O Fund, she anticipates Nvidia’s market capitalization will surpass $10 trillion by 2030.
It’s quite plausible that Nvidia could achieve a market capitalization of $10 trillion before 2030, potentially even earlier, driven by a swift product development plan, the robust defensive barrier provided by its CUDA [Compute Unified Device Architecture] software platform, and because it’s not just a GPU company – it also offers networking solutions and software platforms for AI systems.
Given the rapid developments in the field of AI, I think Kindig hit the nail on the head.
In other words, anyone wanting to join in this lucrative event faces an obstacle: the unpredictability that often comes with such rapid expansion. As we’ve witnessed multiple times this year, even a suggestion of shifting circumstances or a possibility that sales might decrease can cause Nvidia’s stock to plummet. Yet, those with a long-term perspective and the patience to remain steady during the turbulence will ultimately benefit from this once-in-a-lifetime chance.
To conclude, Nvidia’s shares are approximately valued at 30 times their projected earnings for the coming year, a competitive price point given the company’s pivotal role in the advancement of Artificial Intelligence technology.
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2025-07-24 10:23