Nvidia: AI Company Worth $5 Trillion?

Shares of Nvidia have been affected by macroeconomic uncertainty, geopolitical tensions, tariff wars, export controls, and competition. However, its recent earnings, including the fiscal first quarter of 2026, show why investors shouldn't focus on short-term issues but on long-term growth.

Nvidia's AI Dominance

Nvidia's first quarter fiscal 2026 earnings (ending April 27) confirm its leadership in the AI hardware, software, and infrastructure services market. First-quarter revenue increased 69% year-over-year to $44.1 billion, and data center revenue rose 73% to $39.1 billion. These factors could push Nvidia's market value beyond $5 trillion in the next 10 years.

Nvidia dominates the AI chip market with over 80% market share. The latest Grace Blackwell 200 (GB200) GPUs enable organizations to run computationally heavy AI models with performance 25 times higher and at a twentieth of the cost of Hopper H100 chips. The Blackwell ramp-up was Nvidia's fastest product launch and accounted for almost 70% of data center compute revenues in the recent quarter. Major hyperscalers are deploying nearly 72,000 Blackwell GPUs weekly across their data centers and plan to increase output this quarter. Nvidia is sampling GB300 systems at cloud service providers and expects production shipments to begin by the end of the second quarter. While similar to GB200, they offer 50% more high-bandwidth memory capacity and a 50% increase in inference computing performance, allowing cloud service providers to transition from GB200 to GB300 systems while improving performance.

Software Ecosystem

Nvidia's software ecosystem has become a strong competitive advantage, making switching to competitors' chips costly for customers. The CUDA parallel programming platform is used by 5.9 million developers to accelerate GPUs for general-purpose applications. CUDA accelerates all AI models and over 4,400 applications, preventing infrastructure investments from becoming obsolete in the fast-evolving market. The company launched its TensorRT software package for inference optimization and the TensorRT-LLM software library for running large language models efficiently.

Strategic Alliances

Nvidia partnered with Humain to build AI factories with 18,000 GB300 Blackwell chips in the first deployment phase. Nvidia is involved in the Stargate Project, where OpenAI, SoftBank, and Oracle plan to invest $500 billion into U.S.-based AI infrastructure over the next four years. These alliances could significantly boost Nvidia's growth.

In fiscal 2025, which ended Jan. 26, the chipmaker's revenues increased by 114% to $130.5 billion. Analysts expect revenue growth to be lower in the future, but still fast. Nvidia's revenues are forecast to increase by 52.8% and 23.9% in fiscal 2026 and 2027, respectively, after 69% revenue growth in Q1 of fiscal 2026. Nvidia could grow at nearly 20% annually over the next decade, reaching about $808 billion in revenues in fiscal 2035.

Nvidia reported a 55.8% net income margin in fiscal 2025 and could produce a net income margin of nearly 27.9% in fiscal 2035. With $808 billion in revenue, net income would be around $225 billion that year.

Nvidia is trading at about 32.6 times forward earnings. Analysts project a 5-year forward P/E multiple of 23.5x for Nvidia. Assuming this valuation multiple for the next 10 years, the company can reach a market value of $5.29 trillion by 2035. The company is positioned to exceed the $5 trillion market capitalization, even under conservative expectations. Nvidia's AI initiatives, such as Sovereign AI, agentic AI, and physical AI, and increasing demand for chips in gaming and AI PCs, may drive its market value even higher. Gaming revenue rose 42% to $3.8 billion in the first quarter, driven by Blackwell architecture systems. Enterprise AI is also a growth catalyst, with Nvidia bringing AI-powered storage, computing, and networking capabilities to corporate environments. The company's RTX Pro, DGX Spark and DGX Station enterprise AI systems are targeting the $500 billion market opportunity. Nvidia's Omniverse and robotics platforms are powering factory automation and humanoid robotic systems.

Long-term investors should consider investing in Nvidia to benefit from the AI wave over the next decade.