Over the last few years, semiconductor giant Nvidia (NVDA 0.04%) has emerged as the default company by which all things related to artificial intelligence (AI) are measured. Since ChatGPT made its public debut almost exactly three years ago, shares of the chip behemoth have gained a staggering 1,400%.
As of the closing bell on Oct. 28, Nvidia sported a market capitalization of $4.9 trillion -- handily making it the most valuable company in the world.
Given Nvidia's already massive gains, some may be skeptical that investing during all-time highs is a wise decision. Let's unpack what catalysts Nvidia has on the horizon -- both over the short- and-long-term -- to assess whether the stock remains a no-brainer or if the company's seemingly unstoppable run is due for a breather.
NASDAQ: NVDA
Key Data Points
What near-term catalysts does Nvidia have?
Nvidia's most obvious tailwind right now can be summed up in one word: infrastructure. Many of the company's largest customers -- including hyperscalers such as Microsoft, Amazon, Alphabet, Meta Platforms, Oracle, and OpenAI -- have been allocating unprecedented sums toward building data centers throughout the AI revolution.
The subtle nuance to point out from the financial profile above is that many of these companies are actually beginning to accelerate their capital expenditures (capex). While these dynamics could give credence to the idea that AI development is in a bubble, Wall Street sees things differently.
Goldman Sachs is calling for $500 billion of AI capex from just the hyperscalers in 2026. Moreover, McKinsey & Company sees AI infrastructure becoming a $7 trillion market in aggregate through the rest of the decade -- with spending largely concentrated between chip procurement and the outfitting of data centers with additional networking equipment and sustainable energy controls.
What long-term catalysts does Nvidia have?
One of the biggest factors influencing hyperscalers to double down on their AI infrastructure ambitions revolves around Nvidia's lineup of graphics processing units (GPUs). Right now, big tech is paying a premium to get their hands on Nvidia's latest chip architecture, dubbed Blackwell.
However, what investors may be overlooking is the pace of Nvidia's innovation roadmap. The company is already designing a successor product to Blackwell, called Rubin. According to Nvidia CEO Jensen Huang, current demand trends suggest that the Blackwell architecture in combination with Rubin will generate $500 billion in revenue for the company over the coming years.
The key idea to understand here is that despite rising competition from Advanced Micro Devices, Nvidia remains well positioned as the leader in the AI accelerator market.
And speaking of AMD, smart investors have not forgotten about Nvidia's recent collaboration with Intel, featuring a $5 billion equity investment to support future central processing unit (CPU) development, which further heightens the competitive stakes in high-performance computing.
Thinking beyond 2030, Boston Consulting Group founder Phil Panaro sees a number of other catalysts that could propel Nvidia toward a $20 trillion valuation. According Panaro's modeling, AI is only 1% penetrated in the private sector today. As industries such as retail, manufacturing, logistics, financial services, energy, and more continue to embed AI-powered services into their operations, Nvidia is poised to benefit from such secular tailwinds.
In addition, Panaro also thinks that opportunities in crypto -- such as the creation of web3 -- as well as increased budget spend from government agencies for AI also bode well for Nvidia's long-term trajectory.
Image source: Getty Images.
The verdict: Nvidia stock is a no-brainer
Among the 64 sell-side analysts that cover Nvidia, 59 have a "buy" or equivalent rating on Nvidia stock. After analyzing the various catalysts above, it's easy to see why so many on Wall Street see Nvidia as a no-brainer opportunity.
The bigger idea that I want to drive home here is that Nvidia is not just well positioned from a structural perspective. There are plenty of companies across all sectors that have meaningful upside potential as the AI boom unfolds.
Nvidia is different, though. From a technological perspective, the company appears to have built a competitive moat over its chief rivals, making the idea of switching to another platform nearly unthinkable given the costs and operational disruptions that are at stake -- a risk enterprises simply aren't willing to take as they push toward more advanced AI frontiers.
This is what makes Nvidia so unique. Whether you are an existing investor considering doubling down or a new investor contemplating an initial position, now looks like a terrific opportunity to hop on the Nvidia train and buy the stock for the long-haul.
