1 Trillion Reasons Why Nvidia Stock Is a Screaming Buy Now

Keithen Drury, The Motley Fool

Tue, Mar 25, 2025, 3:15 AM 4 min read

Nvidia (NASDAQ: NVDA) has been 1 of the astir ascendant stocks successful the marketplace successful 2023 and 2024. However, 2025 hasn't been truthful benignant to the computing giant, arsenic its banal is down implicit 18% from its January highs.

There are fears that the monolithic AI spending question could beryllium affected by an uncertain economical outlook oregon that Nvidia's largest clients whitethorn look elsewhere to fulfill their computing powerfulness demands. Yet nary of those fears person surfaced yet, and Nvidia's CEO and laminitis Jensen Huang conscionable gave an astonishing outlook into however helium projects spending connected AI computing.

During Nvidia's GTC league (its yearly league astir its products), Huang stated that Nvidia's information halfway infrastructure gross volition deed $1 trillion by 2028. No institution connected world has gross that large, with Walmart currently holding the apical spot astatine $673.8 cardinal successful yearly revenue. Furthermore, that's lone information halfway revenue; it doesn't see immoderate of Nvidia's different segments. However, if Nvidia's information halfway gross reaches $1 trillion by 2028, that volition dwarf immoderate different segment's gross total.

That's a immense number, but it realistic?

Over the past 4 quarters, Nvidia generated information halfway gross of $115.3 billion. However, this conception is seeing singular growth, arsenic Q4 information halfway gross was up 93% from a twelvemonth ago. So, if Nvidia continues astatine this 93% gait and keeps it up implicit the adjacent 4 years (through 2028), volition that beryllium capable to deed $1 trillion?

The answer? Yes.

Should Nvidia proceed astatine its 93% maturation rate, it would really nutrient $1.6 trillion successful information halfway gross by 2028. That's a implicit overshoot of Huang's projections. Nvidia would lone request to turn its gross astatine a compound yearly maturation complaint (CAGR) of 72% done 2028 to marque the $1 trillion projection happen.

So, to spot however realistic this guidance is, investors request to show Nvidia's information halfway gross maturation during each quarterly net report. It needs to enactment elevated supra that threshold during the archetypal fewer years for Nvidia to enactment connected target. If it doesn't, past it won't beryllium astonishing if Nvidia misses its $1 trillion goal.

While a 72% CAGR seems incredibly optimistic, what tin investors expect if Huang is right?

If Nvidia were to scope $1 trillion successful gross and maintain its 56% nett margin, it would nutrient $560 cardinal successful profits. That's a mind-boggling fig that nary institution is adjacent adjacent to close now, and it would supply jaw-dropping returns.