Nvidia has become the world's largest company following a surge in its stock price over recent years. The company now holds a market capitalization of $4.5 trillion.
An investment of $1,000 made in Nvidia shares five years ago is now worth just over $13,500. This performance resulted from growth in Nvidia's revenue and earnings, driven mainly by demand for its artificial intelligence chip systems.
Nvidia's revenue in fiscal 2021 was $16.7 billion. The company is on track to end fiscal 2026 with an estimated $213 billion in revenue. Bank of America estimates the market for AI accelerator chips Nvidia sells could be worth $900 billion in 2030.
Nvidia gets 90% of its total revenue from selling chips for data centers handling AI workloads. Its fiscal 2026 revenue estimate indicates it would sell just over $190 billion worth of data center chips this year.
Mizuho Securities estimates Nvidia's share of the AI accelerator market stands between 70% to 95%. The company faces stiffer competition, with custom chips from Broadcom and Marvell gaining traction, and AMD launching more powerful chips.
Investors note Nvidia's dominance in AI chips stems not just from technological advantage but also from control over the supply chain. The semiconductor giant has reportedly secured a portion of Taiwan Semiconductor Manufacturing's next-generation process nodes.
Even if Nvidia's market share slips to 60% in 2030, its data center revenue could still reach $540 billion based on the $900 billion end-market estimate. That would be nearly three times the data center revenue expected this fiscal year.
Additional catalysts could help Nvidia grow over the next five years. The gaming and AI personal computer business recorded 30% year-over-year growth in revenue in the third quarter of fiscal 2026 to $4.3 billion.
The company's automotive business is gaining momentum, with revenue up 32% year over year in the last reported quarter to $592 million. Nvidia is partnering with several automotive companies and component manufacturers.
Nvidia's earnings are estimated to increase by 57% in the current fiscal year to $4.69 per share. Analysts expect healthy double-digit growth in earnings over the next couple of fiscal years.
There is a chance Nvidia maintains robust earnings growth beyond the next two fiscal years. Even with conservative growth of 20% in three fiscal years after fiscal 2028, Nvidia's bottom line could jump to $16.73 per share after five years.
The Nasdaq-100 has a forward earnings multiple of 25.6. Nvidia trades at a slight discount to that multiple now. Assuming Nvidia trades in line with the Nasdaq-100's forward earnings multiple after five years, its stock price could hit $428.
That points toward potential gains of 130% from current levels. The company still has a substantial addressable market that could drive its long-term growth.