Where will Nvidia stock be in 10 years?

I recently calculated how long it took me to become a millionaire by investing in nvidia (NVDA -3.12%)) In stock 10 years ago. The answer was a shockingly low $3,625 when I crunched the numbers. Nvidia stock has been rising over the past few days, so the magic amount is even lower.

In my backward looking exercise, I also looked into which signs might have pointed to the possibility of a large amount of profit. And for those watching closely, there were some good signs about the company’s prospects.

But what is Nvidia’s outlook now? Where will the company and its stock be in 10 years? I don’t pretend to have a definitive answer. However, I think Nvidia will be in 2035.

Nvidia’s future predictions

The most important assumption I have about Nvidia’s future is that we’ve only seen the tip of the iceberg about how artificial intelligence (AI) will impact the world. However, with the adoption of AI agents that can perform tasks autonomously, we expect to see more icebergs relatively soon.

Can Artificial General Information (AGI) be achieved within the next 10 years? Probably depending on how you define AGI. I agree with Nvidia CEO Jensen Huang that an AI model can pass any test a human can do within five years. However, we do not predict that AI systems will be sentient by 2035 (a criterion for some AGI).

Nvidia fully expects to remain a central player in AI for the next decade and beyond. The company’s new Blackwell GPU architecture has its most powerful AI capabilities to date, but it seems painfully slow and unwieldy compared to what Nvidia will roll out a decade from now. Sho.

Nvidia’s future picture includes the company aggressively expanding into areas such as developing custom AI chips. I also think the autonomous ride market (Robotaxis) will explode in the next few years. Nvidia is one of the best beneficiaries.

AI is Nvidia’s biggest opportunity, but in my opinion, the company will also see tremendous growth thanks to its adoption of augmented reality (AR) and virtual reality (VR). AR and VR applications will require powerful graphics processors, and no company does it better than NVIDIA.

What could go wrong?

Murphy’s Law can affect even the best companies. What could be going wrong that could derail Nvidia’s apparently bright predictions about its future? A few things.

Competition in the AI ​​chip market will almost certainly increase significantly over the next decade. We hope that advanced microdevices will further up the game. We’re also looking at some of Nvidia’s biggest customers who have developed their own AI chips, including Google Parent Alphabet, Amazon, and Microsoft.

Perhaps the most worrisome competition could come from major technological breakthroughs by rivals. Nvidia’s Huang recently broke into quantum computing stock with the comment that practical quantum computers are probably 15 to 30 years away. That may be wishful thinking. I can imagine a scenario where another company develops a quantum computer more powerful than NVIDIA’s GPUs for training and deploying AI models.

As successful as it has been (and I think it will continue to be), Nvidia is not affected by macroeconomic factors. If the global economy goes into a deep and prolonged recession, chip makers may not grow as much as I expect.

I will also be forgiving without admitting that my optimism about the future of AI may be too pie in the sky. Maybe large-scale language models (LLMS) will hit a performance plateau and no better technology will emerge.

multiple doll questions

So far I’ve only addressed where I think Nvidia’s business will be in 2035. But the billion dollar question is, where will Nvidia stock be in 10 years?

Before I try to answer this question, I’ll tell you what I think will happen. Over the past 10 years, Nvidia stock has soared nearly 285 times. We don’t see the stock delivering anywhere near that kind of return over the next 10 years.

However, as mentioned above, I predict major growth opportunities for Nvidia over the next decade in AI, Robotaxis, and AR/VR. Could Nvidia’s compound annual growth rate (CAGR) be at least 15% during this period? I think it’s possible. If we assume a 15% CAGR, the stock will be a four-bagger by 2035, with a market cap of over $18 trillion.

Admittedly, this prediction may be too optimistic. But even if Nvidia offered a much lower CAGR of 8%, its stock would more than double over the next decade, giving it a market cap of over $11 trillion. Unless some unexpected threat emerges that takes the wind out of Nvidia’s sails, the future looks very bright for the GPU maker.