Beth Kindig, technology analyst at the I/O Fund, thinks Nvidia(NASDAQ: NVDA) will ride the artificial intelligence (AI) boom to a $10 trillion valuation by 2030. Should that forecast prove correct, the semiconductor company would be worth more than what Apple, Microsoft, Amazon, and Tesla are currently worth combined.
Kindig's prediction implies substantial upside for Nvidia shareholders. The company's current market value of $3.5 trillion would need to increase 185% to reach $10 trillion. Hitting that target by 2030 would entail share price appreciation of 19% annually over the next six years.
Of course, investors should never put too much stock in price targets (no pun intended), but Nvidia warrants closer consideration due to its strength in AI.
Nvidia participates in several areas of the burgeoning AI economy
Nvidia holds 98% market share in data center graphics processing units (GPU), chips that speed up complex tasks like training large language models and running artificial intelligence (AI) applications. Consequently, despite competition from technology companies like Alphabet and other chipmakers like AMD, Nvidia GPUs are the de facto standard in AI accelerators.
Nvidia began laying the groundwork for that dominance when it introduced its CUDA programming model in 2006. CUDA has evolved into an unparalleled ecosystem of software development tools that let programmers write GPU applications. Nvidia has further cemented its leadership by expanding into adjacent data center hardware verticals, including central processing units (CPUs) and networking equipment purpose-built for AI.
In short, Nvidia participates in many different parts of the burgeoning AI economy. Its ability to innovate across hardware and software is a key advantage, as it lets the company design data center systems with a superior total cost of ownership, according to CEO Jensen Huang. Put differently, Nvidia GPUs are arguably cheaper (despite premium pricing) than competing chips when accounting for direct and indirect costs.
Image source: Getty Images.
Nvidia's Blackwell GPUs could be a significant near-term catalyst
Nvidia reported solid financial results in the second quarter of fiscal 2025, which ended in July 2024, beating estimates on the top and bottom lines. Total revenue increased 122% to $30 billion, driven by particularly strong momentum in the data center segment. Meanwhile, non-GAAP earnings increased 152% to $0.68 per diluted share. Management also gave better guidance that Wall Street anticipated, projecting 80% revenue growth in the third quarter.
Importantly, Nvidia has a major catalyst on the horizon in the launch of its next-generation GPU, Blackwell, which provides up to four times faster AI training and 30 times faster AI inferencing versus than the previous Hopper architecture. The Blackwell production ramp began in the fourth quarter (i.e., the current quarter) and will continue into fiscal 2026.
Earlier this year, CEO Jensen Huang predicted Blackwell would be "the most successful product" in company history, and perhaps the entire history of computing. Several Wall Street analysts are equally optimistic about the next-generation chip. Blayne Curtis at Jeffries in a recent note to clients wrote, "Nvidia continues to see unprecedented demand that far exceeds even their rapidly expanding capacity."
Likewise, Harsh Kumar at Piper Sandler estimates AI accelerator sales will rise $70 billion in 2025, and he believes Nvidia will capture most of that incremental spending as businesses vie for Blackwell chips. Also, Kumar recently mentioned that Nvidia "has historically surprised the Street on the upside during initial stages of product ramps."
With some luck, Nvidia could be a $10 trillion company by 2030
Going forward, AI accelerator sales are projected to grow at 29% annually through 2030, while spending across AI hardware, software, and services is forecast to increase at 37% annually during the same period. Nvidia may be the company best positioned to capitalize on that opportunity due to its participation in so many parts of the AI economy.
However, Nvidia also has an adjacent opportunity as data centers transition from general-purpose computing to accelerated computing. Jensen Huang believes every data center will deploy GPUs in the future, and he expects cumulative spending to total $1 trillion over the next four to five years. Some of that spending will go to data center accelerators, such that sales increase at 25% annually through 2030, according to Grand View Research.
Wall Street expects Nvidia's adjusted earning to increase at 37% annually through fiscal 2027, which ends in January 2027. That estimate makes the current valuation of 66 times adjusted earnings look fair. And if Nvidia maintains a similar trajectory, such that earnings grow at 31% annually over the next six years, its market value will reach $10 trillion in mid-2030 while its valuation falls to 37 times earnings.
The market currently affords Apple a multiple of 37 times earnings, so it seems reasonable to assume Nvidia will have a similar price tag. Having said that, there can be no question that Nvidia would need near-perfect execution and some luck to hit the $10 trillion mark by 2030. Regardless, investors should consider buying a small position today.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon, Nvidia, and Tesla. The Motley Fool has positions in and recommends Amazon, Apple, Microsoft, Nvidia, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
