Nvidia: AI Company Worth $5 Trillion?

Nvidia’s dominance in the AI hardware market continues to solidify, as its recent fiscal earnings highlight the company’s unmatched leadership in AI technology. Despite short-term challenges like geopolitical tensions and export controls, Nvidia’s long-term growth trajectory remains robust, driven by its innovative AI hardware, software ecosystem, and strategic alliances.

The company’s fiscal first-quarter 2026 earnings, ending April 27, showcased a 69% year-over-year revenue increase to $44.1 billion, with data center revenue surging 73% to $39.1 billion. These results underscore Nvidia’s pivotal role in powering AI infrastructure services, positioning it as a key player in the rapidly expanding AI market.

Nvidia’s AI Hardware Dominance

Nvidia currently commands over 80% of the AI chip market, a position strengthened by its latest Grace Blackwell 200 (GB200) GPUs. These GPUs deliver performance 25 times higher than previous models at a fraction of the cost, making them a game-changer for computationally intensive AI applications. The GB200 launch was Nvidia’s fastest product ramp-up, accounting for nearly 70% of data center compute revenues in the recent quarter.

Major hyperscalers are deploying nearly 72,000 GB200 GPUs weekly, with plans to increase output further. Nvidia is also sampling its upcoming GB300 systems, which offer 50% more high-bandwidth memory capacity and a 50% increase in inference computing performance. This upgrade will allow cloud service providers to seamlessly transition from GB200 to GB300 systems while enhancing overall performance.

Software Ecosystem and Strategic Alliances

Nvidia’s software ecosystem has become a significant competitive advantage, making it difficult for customers to switch to rival products. The CUDA parallel programming platform, used by 5.9 million developers, accelerates GPUs for general-purpose applications and ensures that infrastructure investments remain relevant in the fast-evolving AI landscape. Additionally, Nvidia’s TensorRT software package optimizes inference, while the TensorRT-LLM library efficiently runs large language models.

Partnerships and AI Initiatives

Nvidia has formed strategic alliances to further its AI ambitions. The company partnered with Humain to build AI factories equipped with 18,000 GB300 Blackwell chips in the initial deployment phase. Nvidia is also involved in the Stargate Project, a $500 billion investment in U.S.-based AI infrastructure led by OpenAI, SoftBank, and Oracle. These partnerships are expected to significantly boost Nvidia’s growth over the next decade.

In fiscal 2025, Nvidia’s revenues surged 114% to $130.5 billion. Analysts project revenue growth of 52.8% and 23.9% in fiscal 2026 and 2027, respectively, following a 69% revenue increase in the first quarter of fiscal 2026. Nvidia is poised to grow at nearly 20% annually over the next decade, reaching approximately $808 billion in revenues by fiscal 2035.

Financial Outlook and Market Potential

Nvidia reported a 55.8% net income margin in fiscal 2025 and is expected to maintain a net income margin of nearly 27.9% by fiscal 2035. With projected revenues of $808 billion, the company could achieve a net income of around $225 billion that year. Currently trading at about 32.6 times forward earnings, analysts forecast a 5-year forward P/E multiple of 23.5x for Nvidia, suggesting the company could reach a market value of $5.29 trillion by 2035.

Nvidia’s AI initiatives, including Sovereign AI, agentic AI, and physical AI, coupled with increasing demand for chips in gaming and AI PCs, are key drivers of its market value. Gaming revenue rose 42% to $3.8 billion in the first quarter, driven by the Blackwell architecture systems. Enterprise AI is another growth catalyst, with Nvidia bringing AI-powered storage, computing, and networking capabilities to corporate environments.

Long-Term Growth Prospects

Nvidia’s RTX Pro, DGX Spark, and DGX Station enterprise AI systems target a $500 billion market opportunity. The company’s Omniverse and robotics platforms are also revolutionizing factory automation and humanoid robotic systems. As the AI wave continues to gain momentum, long-term investors may benefit from Nvidia’s strategic positioning and innovative technologies over the next decade.