Artificial intelligence (AI) technology has taken the stock market by storm in recent years, driving solid growth for several companies involved in its development and distribution.
Not surprisingly, many AI stocks have created significant wealth for investors in recent years. From Nvidia (NVDA 2.13%) to Palantir Technologies, Broadcom, or Micron Technology, AI has minted multiple high-flying stocks. The good news is that AI adoption is poised to take off in the long run. A third-party estimate pegs the size of the AI market at a whopping $5.3 trillion in 2035, up from $274 billion in 2023.
As a result, it won't be surprising to see AI generate generational wealth for investors in the long run, helping them build enough capital to pass down to their descendants. That's why we are going to take a closer look at Nvidia, a tech giant with the potential to create generational wealth.
Image source: Nvidia.
AI could make Nvidia a much bigger company than it is right now
Nvidia is one of the biggest names in AI right now. Its chips have played a critical role in training AI models and in inference applications. The outstanding demand for its chips has made Nvidia the world's largest company by market cap. But what's worth noting is that Nvidia still has room to grow despite reaching a $4.4 trillion market cap.
NASDAQ: NVDA
Key Data Points
The company finished its 2026 fiscal year (which ended on Jan. 25, 2026) with almost $216 billion in revenue, up 65% from the prior year. What's worth noting is that Nvidia's $78 billion revenue outlook for the current quarter calls for a 77% year-over-year increase, suggesting that it is poised for an acceleration despite its massive revenue base.
There are a few solid reasons why Nvidia is still capable of growing at an incredible rate. The first is that the global AI chip market could grow from an estimated $500 billion in 2026 to $1 trillion in 2030, a compound annual growth rate of almost 19%. Nvidia is the dominant player in this market, with an estimated 90% share, and its growth rate suggests it can sustain its dominance.
So, the incremental growth opportunity in the AI chip market should pave the way for further growth in the company's data center revenue, which stood at just under $194 billion in the latest fiscal year. On the other hand, Nvidia has started benefiting from the adoption of physical AI, which should expand its addressable market beyond just data center chips.
Physical AI is the integration of AI in robots, drones, autonomous vehicles, and robotic arms in factories, among other things. Nvidia reported that physical AI applications contributed an impressive $6 billion to its revenue in fiscal 2026. Don't be surprised to see this market moving the needle in a bigger way for the company as it expands its relationships with companies such as Dassault, Siemens, Caterpillar, LG Electronics, Boston Dynamics, and others to boost physical AI adoption.
Investment bank UBS expects the market for humanoid robots, which resemble the human body and are equipped with AI tech, to grow to a range between $30 billion and $50 billion by 2035. However, humanoid robots could generate sales of $1.4 trillion to $1.7 trillion annually by 2050, driven by lower costs that should ideally improve their adoption rates. So, Nvidia's early move into physical AI could open a massive growth opportunity for the company in the long run.
Another important point is that Nvidia aims to become a full-stack AI company by expanding into software. Technology magazine Wired reports that Nvidia is poised to spend $26 billion on open-weight AI models in the coming year. In simple terms, Nvidia will publicly release the numerical weights of the AI models it develops, so users can customize and run them as needed on a cloud infrastructure of their choice. However, developers are unlikely to have access to the code or the training data.
This approach is expected to give Nvidia an edge over the likes of Anthropic and OpenAI, which offer closed-ended models. In all, Nvidia is positioning itself to control the AI ecosystem from hardware to software. That's precisely why it can sustain healthy long-term growth, which should allow it to deliver greater gains to investors.
Can the stock really jump higher after what it has done in the last decade?
An investment of $10,000 in Nvidia stock a decade ago is now worth $2.2 million. Expecting the stock to replicate such performance over the next decade seems unlikely at present, given its market cap of $4.45 trillion. For some perspective, the global economy was reportedly worth $117.2 trillion last year.
But we never know what the future may hold. Nvidia is plying its trade across multiple trillion-dollar markets, from chips to robots to AI software. As a result, there is ample room for growth in the company's revenue in the long run, from the latest fiscal year's top line of $215.9 billion, which should ideally send this tech stock's market cap much higher.
That's why anyone who is looking to buy and hold a stock that could assist investors in creating generational wealth over the long run should take a look at Nvidia, especially considering that it has a forward earnings multiple of just 22.5. That's almost in line with the S&P 500 index's forward earnings multiple of 22.1. However, it is worth noting that Nvidia's earnings are anticipated to grow at a significantly faster pace than the broader market, paving the way for significant stock price upside.
