Where Will Nvidia Stock Be in 10 Years?
Nvidia: A Powerhouse of Innovation and Growth
Nvidia Corporation (NVDA) has been a massive winner on the stock market in the past decade, transforming an initial investment of just $100 into nearly $25,000 as of this writing. The graphics card specialist has benefited from various growth trends, including the surge of the video gaming market, the advent of connected cars and autonomous driving technology, high-performance computing, and artificial intelligence (AI). With a market capitalization of $3.4 trillion, Nvidia is now the second-most valuable company in the world. But, investors may wonder: where will Nvidia stock be in 10 years?
Nvidia Still Has a Lot of Room for Growth Over the Next Decade
While a 250x jump in Nvidia’s stock price over the next decade might be outlandish, given the global economy’s expected size of $155 trillion in 2035, the company can still deliver respectable gains in the coming decade. Nvidia’s potential catalysts for the next decade include its massive end markets, such as the shift towards accelerated computing in data centers to speed up tasks and reduce power consumption and operating costs, which is expected to unlock a $1 trillion revenue opportunity.
Why Nvidia’s Data Center Business is Poised for Growth
The parallel computing power of GPUs will allow them to tackle intensive workloads, offloading less intensive tasks to CPUs, reducing stress on the system and leading to reduced energy consumption and higher efficiency. This reduced stress on CPUs means they will experience lower wear and tear, extending the life and computational power of data centers. With Nvidia controlling an estimated 85% of the data center GPU market, it is well-placed to benefit from this huge market. Even if Nvidia loses ground to competitors and controls half of the data center GPU market after a decade, its data center revenue could jump by 5x, based on the company’s estimated $1 trillion opportunity.
Other Huge Opportunities Loom for Nvidia
The cloud gaming market, for instance, presents another massive growth opportunity, with Roots Analysis predicting it could generate a staggering $237 billion by 2035. Nvidia has already built a solid position in the cloud gaming space, indicating that this could be another huge multibillion-dollar opportunity that could help sustain healthy levels of growth over the next decade.
Valuations Make Nvidia Worth Buying and Holding
Nvidia is currently trading at 32 times forward earnings, lower than its five-year average forward earnings multiple of 40. Buying Nvidia at this level and holding it for the next decade could be an astute move, considering the company’s massive addressable revenue opportunity that could drive its earnings higher in the long run.
Conclusion
Where will Nvidia stock be in 10 years? The answer lies in Nvidia’s massive addressable revenue opportunity, its control over the chip fabrication supply chain, and its strong positioning in the cloud gaming market. With an attractive valuation, Nvidia is worth buying and holding for the next decade, making it an attractive addition to a diversified portfolio. While growth may not be as explosive as in the past, Nvidia’s fundamentals point to continued success, making it an attractive investment for the long-term.
References:
- Roots Analysis
- Yahoo! Finance
Resources:
- Nvidia Corporation
- Markets and Companies
Recommended Reading:
- "Where Will Apple Stock Be in 10 Years?"
- "Why Amazon Stock is a Buy for the Long-Term"
- "Here’s Why Microsoft Stock is a Good Investment"
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