Nvidia (NVDA 0.48%) has delivered extreme wealth for early investors, but it's also rewarded investors who bought shares fairly recently. Although it's been under pressure this year, it's up more than 740% over the past three years. That's far more than double.
Buying Nvidia stock today would be a no-brainer for anyone who thinks it can replicate that success. But it wouldn't even have to achieve such a rare feat to be valuable to investors. If it doubles five years from now, it would likely beat the market and be a very valuable addition to almost any portfolio.
Let's see if that might be in the cards.
Image source: Nvidia.
Enviable performance
Nvidia has had an unbelievable run over the past few years since generative artificial intelligence (AI) became the hottest thing since sliced bread. Tech companies are racing to develop the most competitive AI platform or integrate some aspect of AI into their user interfaces. Companies now offer AI-generated content, images, summaries, and more, and they're using agentic AI to get more stuff done with less human intervention.
What's common to all of these applications is that they need powerful chips to make the magic happen.
There are two basic parts of bringing generative AI to life. One is training, or the input stage, where large language models (LLM) scan tons of data to build their knowledge base. The other is inference, where the LLMs "infer" what's being asked or prompted to deliver the required output. Nvidia also services other industries with its powerful platform, including gaming, which is what drove higher sales before generative AI heated up.
Nvidia has been unstoppable. In the fiscal 2026 first quarter (ended April 27), sales increased 69% over last year. Earnings per share (EPS) were $0.81, including a charge it took for shipments it couldn't send to China because of U.S. policy. Even with the $0.15-per-share impact, Nvidia's EPS were well above last year's figure.
Unusual opportunities
As LLMs become more stable and effective, they're now going past inference to reasoning, which is a more developed stage of inference that takes a bit longer, but produces better results. Instead of popping out instant answers, LLMs that use reasoning might take a few seconds to "think" and then respond.
To keep up with the ever-increasing demands for powerhouse chips, Nvidia continues to develop more powerful technology. The Blackwell model has given way to Blackwell Ultra, and Nvidia is planning on launching new technology, called Rubin, in 2026.
"AI inference token generation has surged tenfold in just one year," CEO Jensen Huang said, "and as AI agents become mainstream, the demand for AI computing will accelerate."
NASDAQ: NVDA
Key Data Points
Clients use these chips to power huge data centers where all of this is taking place, and big AI-using companies like Amazon, Microsoft, and Meta Platforms are building data centers. Nvidia's data center revenue outpaced total revenue in the first quarter, up 73% from last year.
Nvidia has the best and most powerful chips, and it has the lead in this market by a wide margin. Estimates put it somewhere between 70% and 95% of the AI chip market, and as the opportunity grows, it's easy to see how much it could benefit Nvidia.
Priced to buy
Despite its lofty ambitions and premier performance, Nvidia stock isn't very expensive. At the current price, it trades at only 25 of next year's earnings estimates. That gives the stock extra room to increase without becoming unreasonably expensive, making it easier to imagine scenarios where it can double your money.
From a sales perspective, it's fairly expensive, trading at 23 times trailing-12-month sales. That's a premium valuation for the growth that it has reported. To imagine doubling your money, you'd have to keep that ratio constant, because it isn't likely to rise.
Keeping it constant, Nvidia would have to report a compound annual growth rate of 15% to double over five years. That seems very doable, considering its current performance and future opportunities. And even if it can't sustain such a high price-to-sales ratio, it can probably achieve higher than 15% growth over the next five years, which means it can double even at a lower ratio.
All this means Nvidia stock is likely to double over the next five years -- and it's very possible that it could do it even sooner.
