This AI Stock Is Poised for Explosive Growth Over the Next 5 Years

Artificial intelligence (AI) stocks have already had an impressive run since the AI megatrend kicked off in late 2022, but there's still a ton of potential left if AI computing capacity projections from various analysts end up being accurate. Those projects suggest AI stocks will keep posting market-beating returns throughout 2030 (and maybe beyond).

At the top of most AI stock-buying lists is Nvidia (NASDAQ: NVDA), and for good reason. Nvidia produces best-in-class semiconductor chipsets that have been incorporated into most AI computing infrastructure as we know it today.

As a result, Nvidia stock has had an impressive run over the past three years, and it's poised for explosive growth over the next few years as well. That makes now an excellent time to consider buying.

Nvidia remains the industry leader despite rising competition

Up until a few weeks ago, few would have challenged the notion that Nvidia was the AI computing leader. Then OpenAI announced multi-billion-dollar deals with rivals Broadcom and Advanced Micro Devices. But investors should stay focused on the bigger picture here. If you've looked into how OpenAI is approaching the market, it's clear that it is willing to strike a deal with any company that can provide computing resources. As a result, investors shouldn't draw conclusions based on a couple of deals.

Nvidia has delivered excellent results so far in 2025, with its fiscal 2026 second quarter (ending July 27) revenue rising 56% year over year to $46.7 billion. Nvidia expects this monster growth to continue, with quarterly revenue expected to rise to $54 billion in fiscal Q3. Given Nvidia's propensity for exceeding expectations, I wouldn't be surprised if it does so again in Q3. There's still a massive growth runway for Nvidia, and it's only going to get bigger.

Nvidia sees monster AI computing capacity buildout through 2030

During its Q2 earnings conference call, Nvidia management claimed that global data center capital expenditure would reach $600 billion by the end of 2025, but rise to $3 trillion to $4 trillion by 2030. That's huge growth. If it comes about, it would likely lead to further growth for what has become the world's most valuable company because the company already dominates that segment of the market.

Let's assume 2030 global data center capex lands in the middle of that projection. That points to a 42% compounded annual growth rate (CAGR) over the next five years. Growth rates like that when the industry is already so massive are unheard of. But Nvidia likely has some confidence in its projection. That's because its customers generally have to place their graphics processing units (GPUs) orders years in advance of when they'll actually need them because of supply constraints. Nvidia is likely the recipient of most of these orders, so it has a clear view into the future.

If Nvidia can grow its revenue at a 40% CAGR and maintain its profit margin and valuation, that would translate into a market cap of $25 trillion by the end of 2030. That's a huge 5x upside from today's $4.93 trillion valuation, and would easily be described as explosive growth. Even if Nvidia rises to half of this level, it will still be an incredible investment.

Nvidia's growth is far from over, and as more and more money is spent on AI infrastructure, Nvidia's stock will continue to rise. The global economy has barely scratched the surface of what's possible with generative AI, but it's clear that increased usage will require further computing capacity. This benefits Nvidia over the long term, and makes it one of the best stocks to buy and hold now, despite it already having a nearly $5 trillion valuation.

Keithen Drury has positions in Broadcom and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.