Key Points
This AI giant has seen earnings and its stock price take off in recent years.
The company has built an AI empire and is counting on trillions of dollars in infrastructure spending over the next few years.
Nvidia (NASDAQ: NVDA) has wowed investors with its stock performance over the past several years -- whether you look through a short-term or long-term lens, this artificial intelligence (AI) giant has scored a win. For example, it's heading for a 35% gain this year, adding to an eye-popping 2,100% increase over the previous five years.
There's an obvious reason for this fantastic performance, and that's the fact that Nvidia has been generating enormous levels of revenue from its AI business -- and this, at high levels of profitability. In the most recent full year, Nvidia reported revenue of more than $130 billion, and gross margin exceeded 70%.
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The AI market promises more growth ahead, and investors now have one big question: What will Nvidia's share price look like in the years to come? My prediction is this will be Nvidia's stock price in 2030...
Image source: Getty Images.
The Nvidia of today
Before we dive into my prediction and the math behind it, though, let's take a quick look at how Nvidia has gotten to this point. This will help us better understand the company's future prospects.
As mentioned, AI has been and continues to be a massive opportunity for Nvidia. The company, originally known for powering video games with its graphics processing units (GPUs), repositioned itself to make AI its major focus -- and it did that early in the AI story. That was a smart move, offering Nvidia the opportunity to get ahead of rivals -- and this, along with Nvidia's commitment to annual innovation, is keeping the momentum going.
On top of this, Nvidia has expanded into a wide range of AI products and services including networking tools and enterprise software and is well positioned to play a key role in future phases of AI growth, from AI agents to humanoid robots. This is because Nvidia's GPUs power everything from the training of models to the use of AI to address real world problems.
So, customers need Nvidia every step of the way as they travel along the AI path. Of course, rivals exist, but the high performance of Nvidia's GPUs -- more powerful than other accelerators on the market -- have kept its AI customers coming back.
And in particularly bright news, Nvidia has made moves in recent times to expand its presence across AI and even in the personal computer market. This is thanks to its billion-dollar investment in AI research lab OpenAI and a separate deal with PC chip leader Intel. I would expect these moves to add to revenue in the coming years.
Nvidia's revenue potential
All of this offers us reason to be optimistic about Nvidia stock continuing to climb, but to find out exactly how high it might go, let's start by considering future revenue potential. Right now, Nvidia trades for 27 times sales, and it's generally traded at this level or higher in recent times. The average analyst estimate for revenue this year is about $206 billion, representing a 58% increase from last year's revenue level. And Nvidia has maintained double-digit revenue growth and even triple-digit growth over the past few years.
Even if this growth rate slows to a certain degree, it's likely to remain in the double digits considering forecasts for AI infrastructure spending to top $4 trillion by the end of the decade. This spending is set to benefit a company like Nvidia, which powers data centers with its GPUs.
And this suggests that at a compound annual growth rate of only 23%, Nvidia could grow its revenue to $370 billion by 2030. This level of sales and a potential market value of $10 trillion could keep Nvidia at a price-to-sales ratio of 27 -- and that translates into a share price of $411 in 2030.
This represents a 125% increase from Nvidia's price today -- a feat that's very possible for Nvidia.
Of course, these figures are just examples of one possible scenario, but it isn't far-fetched considering Nvidia's strength so far, commitment to innovation, and the phases of AI growth yet to come. And all of this supports my prediction that Nvidia stock could reach beyond $400 in 2030 as the next era of AI growth heats up.
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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel and Nvidia. The Motley Fool recommends the following options: short November 2025 $21 puts on Intel. The Motley Fool has a disclosure policy.