Key Points
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Nvidia needs AI infrastructure spending to continue to increase for the stock to have more upside from here.
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Nvidia is much more than a GPU company today, which sets it up to see strong growth.
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Nvidia (NASDAQ: NVDA) stock has the potential to surge 150% over the next few years, but one big thing is going to have to happen.
First and foremost, artificial intelligence (AI) infrastructure spending is going to have to continue to climb, and its customers are going to have to signal that this spending is sustainable. Without that happening, little else matters. That’s why this is the one thing that 100% has to happen for Nvidia stock to see big gains from here.
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The good news is that data center AI spending is, by and large, expected to continue to grow rapidly in the coming years. Famed investor Cathie Wood has predicted AI infrastructure investments could hit $1.4 trillion in 2030, which is a big jump from around the $500 billion in spending the market saw last year. The bulk of this spending is projected to go toward computing power, such as Nvidia’s graphics processing units (GPUs), while networking is expected to grow even faster.
That, however, is just the first piece of the puzzle for Nvidia. It will also need to maintain its market-share lead in AI chips. Advanced Micro Devices is set to chip away a little bit at Nvidia’s share in the GPU market following its partnerships with OpenAI and Meta Platforms. Meanwhile, AI ASICs (application-specific integrated circuits) are also set to take some share. However, Nvidia is still positioned to be the market-share leader given the ecosystem it has developed around its chips.
More than just GPUs
One of the most important things that Nvidia has done over the years is really transform itself from a GPU maker into an entire AI infrastructure solutions company. Its networking business has actually been its fastest-growing business, and it’s also moved into other chips, including central processing units (CPUs) and data processing units (DPUs). It’s also worked to expand its strong software moat.
Meanwhile, its “acquisitions” of Groq and SchedMD have better positioned the company for the upcoming age of inference and agentic AI. With Groq, the company has now tied language processing units (LPUs) designed specifically for inference into its ecosystem. SchedMD, meanwhile, has helped it develop its NemoClaw solution for AI agents. With AI agents, data centers are also going to need more CPUs, and Nvidia has purpose-built its new Vera CPU specifically for agentic AI.
Nvidia today has a lot more revenue streams than just GPUs, and Wells Fargo just projected China could add another $25 billion a year in revenue. That could certainly set up the company to produce $20 or more in earnings per share (EPS) in its fiscal 2030 (ending January 2030), which could propel the stock to $450 by the end of 2028.
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Wells Fargo is an advertising partner of Motley Fool Money. Geoffrey Seiler has positions in Advanced Micro Devices and Meta Platforms. The Motley Fool has positions in and recommends Advanced Micro Devices, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
