A strong secular tailwind and some substantial opportunities follow behind the current market downdraft.
Nasdaq Composite (^ixic -4.00%)) It has been running high for over two years to help curb inflation, low interest rate outlook, and the emergence of artificial intelligence (AI) help to promote impressive profits. In fact, since bull markets began in late 2022, the tech-centric index has risen by up to 95% before recent markets have failed.
However, since its peak in December, the Nasdaq has been immersed in the correctional area, falling more than 10% from its recent high. Its magnitude movement can be unsettling, but it offers sharp investors the opportunity to pick up high quality stocks at discounted prices.
One such inventory is nvidia (NVDA) -5.07%)). The company became the de facto poster child of the AI revolution, pushing inventory to new heights, earning 965% in just two years. However, fears about AI adoption, geopolitical concerns, and the pace of economic headwinds weigh on Nvidia, which has fallen 28% from its peak (at the time of this writing).
But there’s good news. Beyond current weaknesses, Nvidia could become the world’s first $20 trillion company, representing an additional rise of over 600%, according to analysts at Wall Street.
Image source: Getty Images.
Side of the tip
Nvidia pioneered the graphics processing unit (GPU) in 1999, revolutionizing the video game space. What distinguished GPUs from existing technologies was the ability to perform parallel processing or multiple mathematical calculations simultaneously. By splitting computationally intensive tasks into smaller bits, they can be accomplished more quickly.
Nvidia quickly discovered that it could speed up other applications using this technology breakthrough, and its cutting-edge chips quickly became the gold standard for high-performance computing (HPC), data centers, cloud computing and, more recently, AI processing.
Plus, there’s more to Nvidia’s GPU than just eye-catching. The company’s Compute Unified Device Architecture (CUDA) programming platform and software architecture AIDS developers make the most of their GPUs. Using the CUDA platform, NVIDIA offers over 400 libraries that help you build, optimize, deploy and scale applications across PCs, workstations, clouds and supercomputers. This ability to leverage the full power of GPUs has made it the biggest choice for a generation of developers and has become an industry standard along the way.
Cuda is so deeply immersed in the computing industry that it’s an odds-on favorite to continue.
The road to 20 trillion dollars
Nvidia currently has a market capitalization of around $2.62 trillion. This means that the rise in stock prices means a 664% rise in stock prices, reducing its value to $20 trillion. According to Wall Street, Nvidia generated nearly $200 billion in revenue in 2026, giving it a positive price (P/S) ratio of around 13. P/S should increase to approximately $1.5 trillion per year, assuming P/S remains constant.
Wall Street currently forecasts NVIDIA revenue growth rate of 50% each year over the next five years. If the company can maintain a robust growth rate, it will soon achieve a market capitalization of $20 trillion in 2031. However, to be clear, a considerable number of stars need to be aligned to reach this threshold. To be honest, I think it’s a long shot.
A strong take
One of the Wall Street analysts is one of Nvidia’s biggest bulls. “I think Nvidia will reach $800 by 2030,” says Phil Panaro, founder and former CEO of Boston Consulting Group Platinion. This would be a market capitalization of $19.52 trillion or a market capitalization of less than $20 trillion.
Analysts show three factors that believe Nvidia’s market capitalization exceeds its noble threshold.
According to Panaro, AI adoption is currently “less than 1%.” To boost Nvidia’s value by six times, only low to medium digit penetration is needed. Panaro estimates that companies will spend around $10 trillion between now and 2030 to convert to Web 3. This is the next generation of internet founded on blockchain. Only about $1 trillion has been spent so far, representing a $9 trillion data center opportunity for Nvidia. According to Panaro, the Ministry of Government Efficiency (DOGE) is tasked with finding and eliminating waste that can “reform the way government manages and delivers.” One example he cited is the creation of the “digital twins” of government infrastructure. This can be used to increase efficiency and eliminate waste.
Panaro believes that the triple opportunity will support the annual revenue growth needed to support Nvidia’s $20 trillion market capitalization.
Volatility can hinder that growth
The analyst case is intriguing, but the current market situation could hinder Nvidia’s progress.
To be clear, I am a long-term Nvidia investor, with stocks accounting for 10% of my portfolio, making it the third largest position. While there is no doubt that Nvidia will continue to thrive, we believe there are challenges ahead.
Nvidia follows lower than the wider market as questions about inflation, consumer demand, geopolitical issues and the proportion of AI adoption. If these conditions persist, the market and Nvidia could drop even further. Like 2022, Nvidia Stock in 2022 plummeted 66% during the recession.
This helps to show that Nvidia stock is unstable and not for faint hearted people. Investors need to train themselves to survive the inevitable peaks and valleys that are part of the stock admission fees that could potentially become life-changing investments.
However, the current decline in the Nasdaq is a compelling opportunity for investors who have been waiting for Nvidia to be sold. The stock is currently trading on advance revenues of less than 24 times (at the time of this writing). This is an attractive price you pay for a company with such a vast opportunity.
So, while it may not reach $20 trillion in the next few years, there is no doubt that Nvidia’s stock will crush the market in the future.
