Nvidia stock is up more than 185% over the last year.
Nvidia (NVDA -4.69%) is on the verge of something big. As of this writing, the company’s market cap is $3.3 trillion, only $150 billion behind the world’s largest company — Apple.
Granted, Nvidia has already claimed the top spot before — this year, in fact. Yet, this time might be different. It’s possible that Nvidia might stay put atop the list.
So, what’s likely in store for this giant company over the next year? And is now the right time for investors to buy? Let’s have a closer look.
Image source: Getty Images.
Demand for Nvidia’s products remains through the roof
There’s one simple reason why Nvidia’s stock has surged by 1,000% over the last two years: artificial intelligence (AI).
Simply put, the skyrocketing demand for AI-powered applications has caught much of the world by surprise — but not Nvidia. Indeed, the company spent years positioning itself for the AI revolution, and because of that, it’s now reaping the benefits.
The company’s top-of-the-line graphics processing units (GPUs) are the brains behind much of the world’s best AI tools. What’s more, the company is already hard at work developing the next cutting-edge GPUs that will power the next wave of AI-related innovation.
The company’s new Blackwell GPUs are currently in production and expected to ship to clients in the fourth quarter. These chips, which reportedly sell for between $30,000 and $40,000, are perhaps the most sought-after technology on the planet. As Nvidia CEO Jensen Huang recently said, “Everyone wants to have the most [Blackwell GPUs], and everybody wants to be the first.”
Nvidia’s rock-solid fundamentals keep getting stronger
As a result of all that incredible demand for its GPUs, Nvidia’s key fundamentals are only getting better. Consider this: In 2022, Nvidia’s annual revenue was $27 billion. Over the last 12 months, Nvidia has reported $96 billion in revenue — roughly four times its 2022 total. What’s more, analysts expect the company to report $178 billion by 2026.
Needless to say, that’s incredible growth, and it’s the biggest reason Nvidia’s stock is skyrocketing. However, it gets even better. Nvidia’s profits are growing even more quickly.
The company reported $4.4 billion in net income in 2022. Over the last 12 months, that figure has jumped to $53 billion — an increase of some 1,200%.
Where will Nvidia’s stock be in one year?
Simply put, it’s difficult to know where Nvidia’s stock will be, because Nvidia’s revenue and earnings growth are so incredibly high. If the company meets or beats expectations, its stock will soar even higher; if it misses those expectations, its stock could plummet.
However, long-term investors should do their best to put those considerations to one side. Ultimately, the key fact about Nvidia is that its products are the premier choice for developers who are leading humanity through its latest technological revolution.
There are likely to be ups and downs along the way, but Nvidia remains a solid long-term stock to own because of its key place within the ongoing AI revolution. So far, that has carried the company to within a whisper of being the world’s most valuable company. Over the next year, I believe the stock will establish itself at the top of the list.
Jake Lerch has positions in Nvidia. The Motley Fool has positions in and recommends Apple and Nvidia. The Motley Fool has a disclosure policy.
