Nvidia (NVDA -1.01%) is currently the world's largest company, with a market cap of $4.4 trillion. However, I think that over the next three years, it could grow to $10 trillion.
If that view proves accurate, Nvidia would be a no-brainer stock to buy at today's prices.
Image source: Getty Images.
The math for a megacap to more than double
Nvidia grew to its current massive size thanks to insatiable demand for its artificial intelligence (AI) processors. Companies cannot get enough of its computing units, which allows it to charge premium prices and book massive profits. And demand doesn't seem to be slowing down.
Nvidia projects that annual global data center capital expenditures will rise to $3 trillion to $4 trillion by the end of 2030. With the big four AI hyperscalers -- Meta Platforms, Microsoft, Amazon, and Alphabet -- spending around $650 billion on capex this year, there's still a massive runway for growth. For 2025, Nvidia estimated that total data center spending would be around $600 billion, and estimating that this spending will double in 2026 seems to make sense based on what the hyperscalers' projections are telling us.
NASDAQ: NVDA
Key Data Points
Nvidia's growth lines up with this projection for the most part, as analysts' consensus estimate is for its revenue to rise around 70% this year. While it's likely that its growth will moderate with each passing year, we're nowhere near the totals that the company believes we will hit.
But how long will it take Nvidia to hit a $10 trillion market cap if this growth rate continues? First, we need to set a reasonable valuation. Because the company is a top-notch executor, I think valuing it at 30 times earnings is fair. So it would need to produce an annual net income of $300 billion. Nvidia's profit margin has consistently hovered about the 50% mark, indicating it would need to generate about $600 billion in revenue to reach a $10 trillion market cap.
When could that happen? It might be fairly soon.
If Nvidia's revenue grows at a 70% pace in its fiscal 2027 (which will end in late January 2027) as Wall Street estimates, its top line will hit $368 billion. If it grows at a 30% pace for the next two years, that will increase to over $620 billion, more than surpassing the $600 billion threshold.
With that in mind, Nvidia has the growth catalysts to easily reach a $10 trillion market cap at a reasonable valuation in the near future. That would also indicate the stock would more than double in three years, making it a no-brainer buy today.
