Nvidia Stock May Double in the Next 3 Years. Here's Why.

Core Viewpoint - Nvidia's stock has surged 42% in the past three months, significantly outperforming the S&P 500's 15% gain, indicating strong market confidence in the company's growth potential [1][2]. Group 1: Market Opportunities - Nvidia's addressable market is expanding, with Citi raising its price target to $190 per share due to the growing demand for sovereign AI infrastructure, which is already generating "billions of dollars" in revenue for Nvidia in 2025 [4][5]. - The company is involved in multiple agreements with European nations to deploy its AI GPUs, aiming to enhance digital sovereignty and economic growth [5]. - Demand for Nvidia's AI accelerators is also increasing in the Middle East, with the company supporting sovereign AI infrastructure development across five continents [6]. Group 2: Revenue Projections - Bank of America estimates the sovereign AI infrastructure market could yield annual revenues of $50 billion in the long term, positioning Nvidia to capture a significant share of this opportunity [7]. - Nvidia's data center revenue reached $115 billion in fiscal 2025, marking a 142% increase from the previous year, with expectations for continued growth in both data center and networking chip sales [10][8]. - The total addressable market for AI compute chips is projected to be $563 billion by 2028, with an additional $119 billion from AI networking chips [9]. Group 3: Future Growth Potential - Even with a potential market share decline to 50%, Nvidia's revenue from AI chips could reach $280 billion, more than doubling its fiscal 2025 data center revenue [11]. - Assuming non-data center revenue grows to $20 billion, total revenue could reach $300 billion, indicating robust growth prospects [12]. - Nvidia's stock trades at over 26 times sales, and with projected revenue growth at an annual rate of 32%, the company could maintain a premium valuation [13]. Group 4: Market Capitalization Outlook - A sales multiple of 26 applied to a projected top line of $300 billion could elevate Nvidia's market cap to $7.8 trillion, effectively doubling its current market cap [14].