Will AGI Take Nvidia Stock To $300?

Core Viewpoint - Nvidia stock has the potential to reach $300 within the next two years, driven by strong revenue growth and a favorable position in the AI market [1][9]. Financial Performance - Nvidia's stock price has increased from approximately $95 to around $174 in just three months, reflecting a nearly 4x increase over the past two years [1]. - The company's revenues grew almost 2x over the last 12 months, with an average annual growth rate of about 69% over the past three years [4]. - Projected revenues could rise from around $131 billion in FY'25 to approximately $334 billion by FY'27, representing over 2.5x growth [4]. Market Trends - The demand for high-performance computing is expected to soar, particularly with the evolution of AI towards Artificial General Intelligence (AGI), which requires significant computational resources [6]. - Nvidia's GPUs are currently the industry standard for powering workloads associated with AGI, positioning the company to benefit from this technological shift [6]. Competitive Landscape - Nvidia has received assurances from the Trump administration to resume sales of its H20 AI chip to China, preserving access to a major AI market [5]. - The company is facing competition in the lower-end market from AMD, which could impact margins [8]. Profitability and Valuation - Nvidia's net margins have improved from about 25% in FY'19 to over 51% in FY'25, driven by better economies of scale and a favorable product mix [8]. - If earnings grow 2.5x, the price-to-earnings (PE) multiple could stabilize around 28x, suggesting a potential stock price of over $300 [9].