Artificial intelligence (AI) has had an undeniable impact on the technology landscape in recent years. Over the past few months, fears of decelerating growth have fueled the popular narrative that the low-hanging AI fruit has been picked. The truth, however, is much more nuanced.
AI chipmaker Nvidia (NVDA 0.48%) is a prime example. The company is the leading supplier of data center graphics processing units (GPUs) that underpin AI models, forming the foundation for both AI training and inference. While the company's relative growth has slowed, absolute demand for these AI-centric chips is still robust.
Investors are climbing a wall of worry, yet the stock remains within striking distance of a new all-time high. Let's look at the company's track record, the opportunity that remains, and what Nvidia will need to do to achieve a $10 trillion market cap.
Image source: Getty Images.
The results are enviable
Over the past decade, Nvidia's revenue has grown by 3,480%, while its net income has surged 10,640%. That performance, combined with its pole position in the AI revolution, has driven a blistering increase in its stock price, which has soared 26,000%. Yet these stellar results are not part of some dusty past.
The company's recent results help provide much-needed context. In its fiscal 2026 second quarter (ended Jul. 27), Nvidia's results continued to accelerate, though at a more moderate pace. It generated record revenue of $46.7 billion, which jumped 56% year over year and 17% sequentially. This resulted in earnings per share (EPS) that rose 61% to $1.08. The headliner was the data center segment -- which includes chips used for data centers, cloud computing, and AI -- as sales surged 73% to $39 billion, fueled by persistent demand for AI.
Management's forecast suggests the growth spurt is poised to continue. For the third quarter, Nvidia's outlook calls for revenue of $54 billion, which would result in year-over-year growth of 54% at the midpoint of its guidance.
Estimates regarding the size of the opportunity run the gamut. The generative AI market could be worth $7 trillion by 2030, according to Goldman Sachs Research. Big Four accounting firm PricewaterhouseCoopers (PwC) is thinking much bigger, calculating that AI could add $15.7 trillion to the global economy by 2030. The disparity in these estimates illustrates an important point: Experts agree the opportunity is vast, but no one knows exactly how big it really is.
Nvidia is the leading supplier of data center GPUs with an estimated 92% of the market, according to IoT Analytics, so it stands to gain the most from the continuing adoption of AI.
NASDAQ: NVDA
Key Data Points
The path to $10 trillion
Nvidia currently boasts a market cap of roughly $4.4 trillion (as of this writing). This means it will take stock price gains of 126% to drive its value to $10 trillion. According to Wall Street, Nvidia is on track to generate revenue of roughly $206 billion for fiscal 2026, resulting in a forward price-to-sales (P/S) ratio of 21. Assuming its P/S remains constant, Nvidia would need to grow its revenue to roughly $467 billion annually to support a $10 trillion market cap.
Wall Street is forecasting annual revenue growth of 26.2% for Nvidia over the coming five years. If the company can achieve that growth rate, it could reach a $10 trillion market cap as early as 2030. Given Nvidia's tendency to exceed Wall Street's expectations, I have gone on record saying it will cross that threshold even sooner.
Don't take my word for it. Beth Kindig, CEO and lead tech analyst for the I/O Fund, has come to the same conclusion (emphasis mine):
We believe Nvidia will reach a $10 trillion market cap by 2030 or sooner through a rapid product road map, its impenetrable moat from the CUDA [Compute Unified Device Architecture] software platform, and due to being an AI systems company that provides components well beyond GPUs, including networking and software platforms.
Given recent advancements in AI and its rapid evolution, I think Kindig is right on the money.
It's important to remember that even if the company can achieve this historic milestone, the path to success won't be a straight line, and there are bound to be fits and starts along the way.
Bears will point to Nvidia's valuation, as the stock is currently selling for 51 times trailing-12-month sales. I would counter that the price-to-earnings (P/E) ratio is ill-equipped to assess high-growth stocks like Nvidia. Using the more appropriate price/earnings-to-growth (PEG) ratio returns a multiple of 0.8, when any number less than 1 is the standard for an undervalued stock.
