The Motley Foolยท2025-07-23 09:15Core Viewpoint - Nvidia has become the world's largest company, significantly outpacing Microsoft, but there are questions regarding its future growth potential [1][7] Group 1: Market Position and Growth Potential - Nvidia's market capitalization could reach nearly $7 trillion by 2028, indicating substantial upside from its current valuation of $4.2 trillion [2] - Nvidia's GPUs dominate the data center market with an estimated market share of around 90%, comparable to Google's search engine market share [5] - The company has seen success in international markets, particularly in China, despite facing export restrictions [6] Group 2: Revenue Projections - Data center capital expenditures are projected to rise from $400 billion in 2024 to $1 trillion by 2028, with Nvidia currently generating $115 billion from data centers in FY 2025 [9] - If Nvidia maintains its market share, it could achieve $288 billion in data center revenue by the end of 2028 [9] - Total revenue projections for Nvidia could reach $311 billion by the end of 2028, assuming a 10% growth in other business segments [10] Group 3: Profitability and Valuation - Nvidia's profit margin is expected to remain around 55%, potentially leading to $171 billion in profits by 2028 [10] - Historically, Nvidia has traded at an average price-to-earnings (P/E) ratio of about 60, but a revised P/E ratio of 45 could value the company at $7.7 trillion by 2028 [11][13] - Continued demand for AI is crucial for Nvidia's growth, making it a compelling investment opportunity [14]