Latest news with #NVDA
Yahoo
an hour ago
- Business
- Yahoo
Prediction: This Artificial Intelligence (AI) Stock Will Hit a $5 Trillion Market Cap by 2028
Nvidia management is excited about the company's long-term growth potential. Data center-related capital expenditures could reach $1 trillion annually by 2028. 10 stocks we like better than Nvidia › There has never been a $5 trillion company. The closest companies to reaching that milestone are Microsoft (NASDAQ: MSFT) and Nvidia (NASDAQ: NVDA). Both companies have market capitalizations of around $3.5 trillion. Using their current growth trajectories as a guide, they could reach that $5 trillion mark in a few years. But which one will get there first? The signs point to Nvidia, based on its impressive growth and the increasing market for its products. Although Nvidia has made investors a boatload of money over the past few years, there's still plenty ahead, making it an attractive stock to own right now. Here's why Nvidia has the potential to be the first $5 trillion company by 2028. Nvidia's rise goes hand-in-hand with the rise of artificial intelligence (AI) and the rise of data centers that help process AI computations. AI hyperscalers (large-scale cloud service providers that offer massive computing resources, storage, and networking infrastructure) like Microsoft are racing to install as much equipment as possible to run AI workloads. That way, they can profit from the various companies running AI on their servers by charging usage fees. While multiple companies are pursuing this approach, Nvidia is the main supplier of the graphics processing units (GPUs) central to their operation. And while there are alternatives to Nvidia's products, it has a 90% or greater share in the data center GPU market, similar to Alphabet's dominance in the search engine industry (through Google). This helps put Nvidia's dominance into perspective. Even better, the demand for data centers is growing far quicker than the growth in Search. Nearly every AI hyperscaler has announced record data center capital expenditures in 2025. Planning, developing, and constructing the sites on which these centers are built takes years, so this heightened spending will persist for multiple years. A third-party estimate Nvidia cited during its 2025 GTC event said global data center spending was $400 billion in 2024, but it is expected to rise to $1 trillion by 2028. For reference, during FY 2025 (which encompasses most of 2024), Nvidia's data center division delivered $115 billion in revenue. So, for every $100 spent on data centers, about $29 went to Nvidia. What will this mean for Nvidia in the future? Let's take a conservative approach to these growth estimates. Say data center capital expenditures only rise to $800 billion, and Nvidia's share of that revenue falls from 29% to 25%. If that happens, Nvidia will still make about $160 billion in revenue from data centers alone in 2028. In FY 2025, Nvidia's non-data center divisions produced $16 billion in revenue. Assuming other divisions won't grow and combined with the projected data center revenue, we'd get $216 billion. That's a 46% gain from today's revenue levels. If Nvidia's market cap were increased by the corresponding projected revenue growth, it would be $5.03 trillion. Certain caveats to this argument exist, like what happens if Nvidia's margins slip or if its valuation decreases substantially. However, we've already built in some of that by removing some market share and lowering the total dollar figure of data center build-outs. I think Nvidia will be the first company to cross the $5 trillion threshold, and it will likely do so in the next few years. Nvidia's potential is still rising, and investors should ensure that they're invested in this top-notch AI play for the foreseeable future. Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor's total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Alphabet and Nvidia. The Motley Fool has positions in and recommends Alphabet, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Prediction: This Artificial Intelligence (AI) Stock Will Hit a $5 Trillion Market Cap by 2028 was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21 hours ago
- Automotive
- Yahoo
Nvidia's Bringing Sovereign AI to Germany. Should You Buy NVDA Stock Here?
Artificial intelligence (AI) darling Nvidia's (NVDA) CEO Jensen Huang has been championing the idea of 'sovereign AI' since 2023, a vision rooted in the belief that every nation should have ownership over its own AI, shaped by its unique language, culture, and values. And now, Europe is starting to take this message seriously. Just last week, the chip giant partnered with Deutsche Telekom (DTEGY) to introduce sovereign AI in Germany, unveiling plans to develop an AI-powered industrial cloud for European manufacturers. This so-called 'AI factory,' which will be operated by Deutsche Telekom, is expected to be up and running by 2026. It's designed to help European manufacturers integrate AI into a wide range of applications, from design and engineering to simulation, robotics, and digital twins. 'It Has No Utility': Warren Buffett Doesn't Care How High Gold Goes, He Isn't a Buyer OpenAI CEO Sam Altman Says 'We Are Heading Towards a World Where AI Will Just Have Unbelievable Context on Your Life' Archer Aviation Is Betting Big on Its Fledgling Defense Business. Does That Make ACHR Stock a Buy Here? Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today! In fact, this is just the beginning. Nvidia is also looking beyond Germany, with plans to expand its chip footprint into data centers across Spain, Italy, the United Kingdom, Finland, and Sweden. So, with sovereign AI finally gaining traction in Europe, is Nvidia's growing role in this development worth investors' attention? California-based Nvidia Corporation (NVDA) has rapidly risen to the forefront of the tech world, thanks to its game-changing advances in AI and GPU technology. From powering immersive gaming experiences to fueling data centers, autonomous vehicles, and high-performance computing, Nvidia's chips are the engine behind countless modern breakthroughs, firmly establishing the company as a driving force in the digital revolution. With a staggering $3.5 trillion market cap, Nvidia has cemented its place among the world's most valuable companies. But in 2025, the chip giant's meteoric rise has started to lose a bit of steam. A mix of geopolitical headwinds, including escalating U.S.-China trade tensions and tariff battles, along with growing investor caution around the pace of AI spending and the emergence of new competitive chips, have all weighed on investors' sentiment. After an eye-popping 794% return over the past three years, Nvidia is up just 7.3% so far this year, a far cry from its previous pace, yet still outpacing the broader S&P 500 Index's ($SPX) modest 1.7% gain during the same stretch. High-growth giants like Nvidia rarely come cheap, and with its dominant position in the AI world, that premium is expected. The stock currently trades at 35.4 times forward earnings, well above sector norms. However, on a positive note, that valuation is actually more reasonable than it's been in the past. Compared to its five-year average of 47.33x, Nvidia's current multiple suggests the stock, while still expensive, isn't as overheated as it once was. All eyes were on Nvidia last month, when the chip king dropped its fiscal 2026 first-quarter earnings results on May 28, and once again, it blew past expectations. Revenue skyrocketed 69% year-over-year to $44.1 billion, blowing past the $43.3 billion estimate. Once again, Nvidia's data center segment stole the spotlight, delivering aggressive growth as the company continues to power the engine behind the AI revolution. Nvidia's data center business delivered a wonderful 73% annual surge to $39.1 billion, accounting for a dominant 88% of the company's top-line figure. Meanwhile, its gaming segment, driven by demand for high-performance 3D chips, climbed 42% to $3.8 billion. Even its automotive and robotics division joined the growth party, accelerating 72% year over year to $567 million. During the quarter, Nvidia hit a regulatory speed bump when the U.S. government ruled that its previously approved H20 chip for China would face new restrictions. The impact was costly. Nvidia took a $4.5 billion charge for excess inventory tied to the chip and estimated it lost out on $2.5 billion in potential sales. As a result, the company's adjusted gross margin landed at 61%, but without the China-related hit, it would have been a much stronger 71.3%. On the bottom line, Nvidia posted adjusted earnings of $0.81 per share, up 33% year over year and topping estimates by 8%. Without the drag from the H20 chip charge, that figure would've jumped to $0.96. Nevertheless, investors appeared satisfied with the company's Q1 performance, with the stock soaring 3.3% on May 29. For the second quarter of fiscal 2026, Nvidia is projecting revenue of $45 billion, give or take 2%, a figure that already accounts for an estimated $8 billion hit from recent export control restrictions impacting its H20 chips. On the profitability front, GAAP and non-GAAP gross margins are expected to land at 71.8% and 72%, respectively, with a 50-basis-point wiggle room. Despite the headwinds, Nvidia is still aiming high, targeting gross margins in the mid-70% range by the end of the year. Overall, Wall Street's confidence in Nvidia remains rock-solid, with the stock still carrying a resounding 'Strong Buy' consensus rating, reflecting unwavering confidence in its long-term story. Of the 44 analysts offering recommendations, 37 are giving it a solid 'Strong Buy,' three suggest a 'Moderate Buy,' three advocate 'Hold,' and the remaining one gives a 'Strong Sell.' The average analyst price target of $174.02 indicates 23% potential upside from the current price levels. The Street-high price target of $220 suggests that NVDA could rally as much as 55% from here. As sovereign AI gains traction across Europe, Nvidia is positioning itself at the core of the region's AI ambitions. Through strategic partnerships like the one with Deutsche Telekom in Germany and a broader push into European data centers, the company is ensuring that even as countries strive for AI independence, they continue to heavily rely on Nvidia's technology. With China sales constrained by export restrictions, this European expansion opens up a timely new growth avenue. Plus, taking into account the company's strong fundamentals and continued backing from Wall Street, Nvidia's latest European expansion adds another powerful layer to its growth story. In a market where regional AI independence is becoming a priority, NVDA's strategic move certainly deserves investors' attention. On the date of publication, Anushka Mukherji did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
Yahoo
a day ago
- Business
- Yahoo
History Says Now Is an Excellent Time to Buy Nvidia Stock
Nvidia's business is still growing at a rapid pace. Data center buildouts are set to rise 150% in four years, according to one projection. The stock isn't cheap but trades at a discount to its historical levels. 10 stocks we like better than Nvidia › Nvidia (NASDAQ: NVDA) stock has been the one that got away for many investors. I am also a part of this group, as I owned the stock from early 2023 to mid-2023 before selling shares. I eventually got back into Nvidia stock in late 2024 and have made a solid profit since then. This illustrates a valuable lesson: Just because you missed an initial run-up in the stock doesn't mean it's too late to buy now. I think Nvidia could still be an excellent buy now, and some historical values back that claim up. Nvidia is a company focused on graphics processing units (GPUs). It pursues all avenues that bolster its GPU dominance, including software and other infrastructure necessary to support GPUs. GPUs are a different style of computing unit, as they can process multiple calculations in parallel rather than just one. This ability gives them an edge in tasks that require high-powered computing, such as gaming graphics (their original purpose), cryptocurrency mining, engineering simulations, drug discovery, and their most important use case yet: artificial intelligence training. The AI arms race caused Nvidia's stock to boom because every AI hyperscaler used Nvidia GPUs to train and run their models. This demand has persisted for longer than most investors thought, and it doesn't look to be slowing anytime soon. In Q1 FY 2026 (ending April 28), Nvidia's revenue rose an impressive 69% year over year to $44 billion. That figure was impacted by the U.S. government's decision to ban the sale of H20 chips in China, which also affected Q2's guidance. Despite that headwind, Nvidia is still expected to grow revenue by 50%. So, even without China, Nvidia is still posting impressive growth. Furthermore, Europe has largely been asleep at the wheel while China and the U.S. are in an AI arms race. However, that looks like it's changing, as Nvidia has announced that multiple AI "factories" (data centers filled with Nvidia GPUs) are under construction in Europe. This could boost Nvidia's growth, propelling it much higher over the next few years. This vision backs up a third-party projection that Nvidia cited during its 2025 GTC event. The projection claimed that worldwide data center construction topped $400 billion in 2024 and could rise to $1 trillion by 2028. During FY 2025 (which encompasses most of 2024), Nvidia generated $115 billion from data center GPU sales. If this spending projection comes true and Nvidia maintains its market share of those capital expenditures, Nvidia's stock could have a ton of upside. But there are also signs that Nvidia's stock is a great buy compared to historical levels. 2025 is shaping up to be very similar to 2024 for Nvidia's stock. During 2024, most investors were convinced that analysts were overprojecting earnings, so it traded for a relatively low forward price-to-earnings (P/E) ratio during the year's first half. Then, investors realized that this growth was real and would extend well into the following year, so the price shot up and Nvidia traded in the mid-40s forward P/E range. That same thing is happening right now, as Nvidia's forward P/E ratio is starting to creep up, although it still has a ways to go before it reaches the mid-40s level. If this occurs, Nvidia will give investors a solid profit from now until the end of the year. However, I think the future is still incredibly bright for Nvidia, as we haven't scratched the surface of the required computing capacity to operate in an AI-first society. This will fuel Nvidia's stock for years to come, making it an excellent buy-and-hold for the long term. Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $660,821!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $886,880!* Now, it's worth noting Stock Advisor's total average return is 791% — a market-crushing outperformance compared to 174% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. History Says Now Is an Excellent Time to Buy Nvidia Stock was originally published by The Motley Fool Sign in to access your portfolio
Business Insider
a day ago
- Business
- Business Insider
Nvidia-Backed SandboxAQ Introduces New AI Medical Data
SandboxAQ, an artificial intelligence (AI) startup backed by Nvidia (NVDA), released new data today that could help drug makers develop new medicines. This data includes details on how drugs connect to proteins, which could help scientists better determine the effectiveness of a treatment. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Interestingly, this data doesn't come from years of lab research. Instead, SandboxAQ produced it with the help of Nvidia's processors. This allowed it to create simulated synthetic molecules based on real-world data. SandboxAQ believes the information gleaned from these virtual tests of proteins will assist with training AI models. These models could then aid scientists as they research new medical treatments. Nadia Harhen, general manager of AI simulation at SandboxAQ, told Reuters that this will allow researchers to 'use the synthetic data in a way that's never been done before.' What Does This Mean for Nvidia? First off, Nvidia is already a backer of SandboxAQ, meaning it wants to see the company succeed. The introduction of new data to train AI models is a boon to NVDA, as it is the world's leading provider of graphics processing units (GPUs) used in AI servers. The more uses there are for AI, the higher the demand for AI servers. That will also push demand for Nvidia's products higher, boosting its business and potentially further securing its dominance in the AI sector. Recent analyst coverage backs up this idea. Five-star Barclays analyst Thomas O'Malley reiterated a Buy rating and increased his price target for NVDA stock to $200 from $170, suggesting a 38.77% upside. Is Nvidia Stock a Buy, Sell, or Hold? average NVDA stock price target of $173.19, representing a potential 20.17% upside for the shares.
Yahoo
2 days ago
- Automotive
- Yahoo
There's Still an ‘Enormous' Reason to Buy Nvidia Stock in 2025
Despite recent market volatility and geopolitical concerns, Bernstein analysts maintain their bullish stance on Nvidia (NVDA), describing the opportunity as 'enormous' and arguing that the AI revolution is still in its early stages. According to Bernstein, Nvidia is beginning a new product cycle with its groundbreaking Blackwell GPUs, which are experiencing unprecedented demand. The investment firm has a target price of $185 for NVDA stock, above the current price near $145. Trump Is Giving Tesla's Robotaxis a Leg Up Ahead of June 22. Should You Buy TSLA Stock Now? Dear Nvidia Stock Fans, Mark Your Calendars for July 16 The Trump Family Is Betting Big on Mobile Phones. Should Apple Stock Investors Be Worried? Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. Nvidia's Blackwell chips are reportedly sold out for the next year, with supply-demand imbalances expected to persist throughout 2025. This tight supply environment supports pricing power and is likely to translate into revenue growth for the coming quarters. The chip maker's technological leadership has enabled it to control over 90% of the GPU market, supplying critical hardware to tech giants such as Microsoft (MSFT), Google (GOOGL), Meta (META), and Tesla (TSLA). Nvidia is at the forefront of addressing the global labor shortage crisis, with 50 million unfilled positions across the manufacturing and logistics sectors. Through a strategic partnership with Hexagon, Nvidia is enabling the development of AEON, an advanced humanoid robot designed for industrial applications. AEON leverages Nvidia's robotics ecosystem. AI supercomputers train foundation models, while the Omniverse platform provides simulation environments for testing and optimization. Finally, robotic computers execute the models in real-world applications. This integrated approach accelerates development timelines, with AEON mastering core locomotion skills in just a few weeks. The humanoid robot addresses critical industry needs, including reality capture, manipulation tasks, part inspection, and complex industrial operations. And importantly for investors, Nvidia's innovative work in humanoid robotics is just one small piece of the pie. It also offers investors exposure to data centers, high-performance computing, sovereign AI, autonomous vehicles, gaming, and more. After a pullback in 2025, Nvidia's valuation has reset to decade-long lows relative to projected earnings. Today, the tech stock trades a 33.6x forward earnings, below its 5-year average of 49.2x. Bernstein maintains an 'Outperform' rating, emphasizing that fears of the AI trade being 'over' are premature. With the global AI industry expected to grow at a 42% compound annual rate over the next decade and Nvidia maintaining its technological moat, Bernstein believes the growth story remains in its infancy. Out of the 44 analysts covering NVDA stock, 37 recommend 'Strong Buy,' three recommend 'Moderate Buy,' three recommend 'Hold,' and one recommends 'Strong Sell.' The average target price for Nvidia stock is $174, indicating an upside potential of over 20%. On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
