Continuing excitement about artificial intelligence (AI) has helped to boost the stock market in recent years. Industry analysts, executives and even investors are beginning to believe the technology can provide a major promotion to the economy in the long term. Therefore, it is best to be exposed to this trend in your portfolio.
There was no better way to play the rise of AI than owning it nvidia (NASDAQ: NVDA). Inventory has grown by 1,530% over the past five years (as of July 23rd) as it continues to register incredible growth. Business has its current status Market capitalization At $4.1 trillion, it has become the most valuable company on the planet.
But where will Nvidia be in five years? Investors should think about the situation overall.
Image source: nvidia.
There is no company that wants to be left behind in AI races. This is especially true when it comes to training AI models and building related apps. All of this requires substantial computing power. This need for power supports Nvidia’s sales growth.
The company sells powerful graphics processing units (GPUs) that help run data centers. This segment alone increased revenues of $39.1 billion in the first quarter of 2026 (ends April 27th). This is a 73% jump from the previous year, accounting for 89% of NVIDIA’s total revenue.
It is not realistic to expect Nvidia to grow into the sky, but Wall Street remains optimistic. The consensus analyst forecast calls for the company to generate revenue at a combined annual rate of 31.5% between 2025 and 2028. According to the UN Trade Development Report, the global AI market will be valued at $4.8 trillion in 2033, compared to just $189 billion in 2023.
That demand drives incredible profitability. Over the past five years, Nvidia’s operating margin averaged 40%. Competition could reduce this over time. This is because supply can pose pricing pressures to reach insatiable demand. However, Nvidia’s major position in the industry, coupled with the success of the CUDA software platform, has become a vy hope for colleagues.
Certainly there was a lot of hype surrounding AI. As AI begins to automate and replace jobs, we believe that technology will completely change our economy, disrupt the industry, and drive many people out of work. and GDP You’ll probably get a boost along the way.
It can happen. However, a more reasonable outlook makes the most sense. Bill Gates, co-founder and former CEO Microsoftonce said something along the human line, overestimating what new technology could do in the short term, and underestimating what it would do in the long term.
I think this is the right way to show the possibility of AI trajectory. Mass spending on AI development cannot continue indefinitely. And no one has any clue as to how the innovation associated with it will be built into the future. Ideally, you should settle somewhere in the middle.
But what happens if the AI is a perfect bust? If you don’t lead a new wave of product and service launches that create opportunities for legitimate revenue generation, it could be all hype even without results.
Nvidia is the only biggest beneficiary of the AI infrastructure boom. But if the ultimate financial return doesn’t support everything Customer capital expendituresand then the durability of demand and growth is a major question mark for the next five years or more.
As of this writing on July 23, NVIDIA shares are trading at a positive price and a rate of return of 39.5. Given the revenue and profit growth of monsters, and the dominant industry position, I don’t consider the valuation expensive.
So you wouldn’t be surprised if this AI stock beats the market between now and 2030. In my opinion, it depends on whether AI is actually a game-changing technology that many believe.
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Neil Patel There is no position in any of the stocks mentioned. Motley Fool has jobs at Microsoft and Nvidia and recommends. Motley Fool recommends the following options: A $395 phone at Microsoft for January 2026 length and a $405 phone to Microsoft for January 2026 short term. To Motley’s fool Disclosure Policy.
