Nvidia(US:NVDA) The Motley Fool·2025-03-25 10:15Core Viewpoint - Nvidia has experienced significant stock performance in 2023 and 2024, but has seen an 18% decline in 2025 from January highs [1] Group 1: AI Spending and Market Outlook - Concerns exist regarding the impact of economic uncertainty on AI spending and potential shifts in Nvidia's client base [2] - Nvidia's CEO, Jensen Huang, predicts that data center infrastructure revenue will reach $1 trillion by 2028, surpassing any current company revenue [3] Group 2: Revenue Growth Projections - Nvidia generated $115.3 billion in data center revenue over the past four quarters, with Q4 revenue up 93% year-over-year [4] - If Nvidia maintains a 93% growth rate, it could achieve $1.6 trillion in data center revenue by 2028, but only needs a 72% compound annual growth rate (CAGR) to meet the $1 trillion target [5][6] Group 3: Profitability and Market Capitalization - Achieving $1 trillion in revenue with a 56% profit margin would yield $560 billion in profits, a figure unmatched by any current company [6] - If Nvidia reaches the $1 trillion revenue mark and trades at the S&P 500 average P/E ratio of 22.3, its market cap could rise to $12.5 trillion, indicating a potential 330% stock increase over four years [7] Group 4: Current Valuation and Investment Potential - Nvidia's stock is currently priced at 26 times forward earnings, which is lower than many tech peers, making it an attractive investment even if it falls short of the $1 trillion goal [9]