Where will Nvidia be in 5 years?

Nvidia (NVDA -7.36%) the stock is hot. The artificial intelligence (AI) giant’s shares have returned 141% this year to August 30, making it the best performer on S&P 500 index. The stock has also been a huge long-term winner. It has returned 25,580% over the past decade, turning a $1,000 investment into $256,800. (For context, the S&P 500 returned 19.5% and 239% during these periods, respectively.)

Investors, of course, are concerned about Nvidia’s future. No one can accurately predict the future, especially in the rapidly evolving world of technology, but with a solid understanding of Nvidia and the environment in which it operates, we can make some educated predictions.

Here are some predictions for what Nvidia’s business will look like in five years.

1. CEO Jensen Huang will have recently retired or will be about to do so

For reference, Huang turned 61 earlier this year, according to public records, which would make him 66 in the summer of 2029.

As someone who regularly listens to Nvidia’s earnings calls, it’s obvious to me that Huang loves his work. However, it’s exhausting being the CEO of a massive company, especially one that operates in the cutting-edge, ultra-competitive technology space. Huang has led the company since he co-founded it in 1993.

It would be fantastic for investors if Huang runs Nvidia as much as possible because he is the No. 1 competitive advantage. 1 of the company. (Maybe they could create a digital twin of his using Nvidia’s Omniverse platform!) Realistically, I think investors will be lucky if he continues as CEO for another four or five years, assuming he stays healthy enough. So, I’m going with the prediction that in five years, Huang will have recently stepped down as CEO or will be on the verge of doing so. Hopefully he will move into the role of chairman of the board, again, assuming he remains capable.

This thread begs the question: Does Nvidia have a CEO succession plan?

2. Nvidia GPUs will continue to dominate the AI ​​chip space

It is widely accepted as a fact that Nvidia has more than 90% share of the advanced AI graphics processing unit (GPU) chip market and more than 80% of the global advanced AI chip market. (The latter category mainly includes custom chips — or application-specific integrated circuits (ASICs) — that many of the big tech companies have developed or are developing for specific use cases.)

Currently, most of the most advanced AI chips are found in data centers, but eventually they will become more common in “edge applications” such as in cars and robots.

The kind of dominance Nvidia enjoys is a wonderful thing for investors, given how fast the market for AI chips is growing and expected to continue growing. This market was already growing at a rapid pace, which became a turbo-charged pace with the advent of generative AI. This is the technology that has wowed the tech world since OpenAI launched its ChatGPT chatbot in late 2022.

In fiscal 2024 (ended Jan. 28), Nvidia’s data center revenue soared 217% year-over-year — or tripled — to $47.5 billion. In the second quarter of fiscal 2025 (ended July 28, 2024), which it reported last week, data center revenue rose 154% year over year to $26.3 billion , representing 87% of the company’s total revenues of $30 billion.

The majority of data center revenue is generated from AI chips and related technology (software, networking equipment, and other hardware) that together enable AI applications. Nvidia is much more than just a chip company. Indeed, one of its biggest competitive advantages comes from its huge ecosystem of developers who use CUDA software to develop AI applications.

Lisa Su, who is the CEO of competitor Nvidia Advanced microdevicesor AMD, projects that the global market for chips to accelerate AI processing in data centers will reach $400 billion in revenue by 2027, which equates to a compound annual growth rate (CAGR) of 72.7% . Barring severe anti-competitive regulatory action against Nvidia, I think it has the potential to capture the majority of this total addressable market (TAM) for a good number of years, with AMD, Inteland manufacturers of custom ASICs — such as Broadcom — combined capturing a lower share.

3. Nvidia will make more and more money as driverless vehicles become more legal in the United States

In 2029, I don’t think fully autonomous vehicles will be legal in the US, but they will be close to being so. The closer we get to legalization in the US (and other countries), the more money Nvidia should make from this giant secular growth trend.

This comment from CFO Colette Kress during last week’s fiscal second quarter earnings call sums up how dominant Nvidia’s AI-powered self-driving vehicle platform, DRIVE, is in this space:

Automotive was a key growth driver for the quarter every automaker developing technology for autonomous vehicles uses Nvidia in their data centers. The automotive industry will generate multi-billion dollar revenues in on-premise and cloud consumption and will grow as next-generation AV (autonomous vehicle) models require much more computing. (my emphasis)

4. The X Factor

In my March 2020 article on the same topic as this one, I predicted that “Nvidia is incredibly innovative, so there’s a good chance the company will introduce at least one major new technology that takes almost everyone by surprise.”

This prediction came true in spades. Since then, Nvidia has launched Omniverse, which allows companies to develop their own metaverses, and a number of major innovations to enable generative AI, a technology that no one, or almost no one, has heard of in 2020. This is the nature of disruptive technology.

So I’m extremely confident that in the next five years, Nvidia will have at least a few huge businesses — meaning multi-billion dollar ones — that are completely new and that almost nobody (with the possible exception of some researchers) can predict now.

5. Nvidia stock will outperform the market

There’s no way anyone can accurately predict Nvidia’s stock price five years from now. A big unknown is the overall market performance during this period, which would greatly affect Nvidia’s stock performance. A recession during this period is possible, for example.

That said, given the predictions in this article, I’m confident that Nvidia stock will outperform the market over the next five years.