Finance
A Wall Street analyst just predicted that Nvidia would reach a market cap of $10 trillion. Is that actually possible?
Nvidia (NASDAQ: NVDA) has been one of the best stories on the market, with the stock up more than 3,300% in the past five years. That’s an incredible run that has brought the market cap to $2.8 trillion.
However, a Wall Street analyst recently predicted that the stock will have a lot more headroom in the coming years. I/O Fund’s Beth Kindig boldly predicts the chipmaker will reach a $10 trillion valuation by 2030.
Let’s look at the reasons behind her prediction and whether such a move is possible.
Blackwell and automotive to drive growth
A big part of Kindig’s thesis around Nvidia has to do with the company’s acceleration graphics processing unit (GPU) release schedule, with new product iterations released every year instead of every two years. This doubles the already rapid pace of innovation and effectively pits the company’s new technology against older technology. In both cases, Nvidia wins.
Kindig is also very excited about Nvidia’s new Blackwell platform. She noted that while Nvidia’s Hopper platform powered Nvidia to $100 billion in annual revenue in the data center segment, Blackwell will bring that annual revenue total to $200 billion by the end of fiscal 2026. She sees that Nvidia will maintain its grip on the market. artificial intelligence (AI) data center market in the coming years. She expects the data center market to rise to $400 billion by 2027 and to $1 trillion by 2030.
Beyond the data center, the technology analyst sees the automotive market as the next big area for Nvidia. This segment is small right now, but Kindig believes this is another potential $300 billion opportunity that will develop over the next two to five years.
Kindig expects Nvidia to continue to maintain its huge market share thanks to the moat it has created with its CUDA software platform. She noted that AI developers are learning to program GPUs on the CUDA platform, which helps retain customers in the Nvidia ecosystem.
Can Nvidia’s market cap really reach $10 trillion by 2030?
If Nvidia wants to reach $400 billion in revenue by 2027 (last twelve months, revenue was about $80 billion), it would need to grow revenue at about 50% per year between 2025 and 2027. With $1 trillion in revenue by 2030, the company should grow revenue by about 35% annually between 2028 and 2030.
If the company’s adjusted operating expenses grew an average of 13% quarter-over-quarter through 2030 (similar to last quarter’s sequential growth), and we applied a 20% tax rate to operating income, Nvidia would close to generate $450 billion in adjusted revenues. by 2030. At a market cap of $10 trillion, the stock would only have a price-to-earnings ratio of 22 times. That would still make the stock cheap.
These assumptions, which certainly reflect very robust growth estimates, are certainly not out of the question given Nvidia’s recent revenue growth. The company has a dominant position in GPUs and currently the demand is insatiable. The concerns lately have been more about producing enough GPUs to meet demand.
How high Nvidia’s market cap can go could come down to how much more production Nvidia can get through its semiconductor manufacturing partners like Taiwanese semiconductor manufacturing. Can they add enough capacity and improve the technology by moving to 2 nanometer chips? Some of the potential growth is beyond Nvidia’s control. That adds some risk to estimating future market capitalization.
Since the company is constantly bringing new generation GPU platforms to the market, it should also be able to make some price increases. It has already announced a new AI chip platform called Rubin, scheduled for 2026. Staying ahead will give it pricing power in a semiconductor industry where chip prices often fall over time. However, given the moat and technological advancements, prices should also be on Nvidia’s side.
Can Nvidia reach a $10 trillion market cap by 2030? The answer is yes. It even seems possible that this prediction is too low.
The biggest risk the company faces is an increase in demand as companies rush to catch up in AI and demand eventually declines. However, if we are still in the early stages of AI and demand remains robust well into the future, the sky is the limit for Nvidia.
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Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has one disclosure policy.
A Wall Street analyst just predicted that Nvidia would reach a market cap of $10 trillion. Is that actually possible? was originally published by The Motley Fool
