Nvidia stock will rise over the next 5 years. Here is 1 reason why.

no doubt Nvidia (NASDAQ: NVDA) has already seen his stock rise. As the chipmaker has become the face of the artificial intelligence (AI) revolution, its share price has soared, and is now up more than 600% since the start of 2023. However, this was not the first time that the market cap of the company multiplied in a relatively short period. Between the beginning of 2020 and the end of 2021, Nvidia stock gained more than 400%.

I think it may be a while before we see the company make another run on par with any of these. Nvidia is certainly in a strong position to continue to grow its market-leading data center segment for some time. Major clients such as Meta platform and Alphabet they show no signs of slowing their massive spending on data center infrastructure. That said, its growth will likely be slower than what fueled the most recent round.

We’re already seeing this play out. As the chart below shows, year-over-year quarterly revenue growth is declining. Don’t get me wrong — its 122% growth in Q2 was still incredible, but it was less than half of what the previous two quarters delivered, and the company is projecting roughly 80% year-over-year growth for the quarter current.

Autonomous driving will be the catalyst for Nvidia’s next big inflection point

In Q2, Nvidia’s automotive division produced $346 million in revenue. It’s not bad, but it’s far from where it could be in the future. In fact, CEO Jensen Huang believes it’s a $300 billion market. This would include the software and hardware that will be embedded in both the cars and the data centers that will be integral to powering a network of autonomous vehicles. Huang says he believes this will be “one of the biggest AI industries in the world.”

Of course, we should take a CEO’s words with a grain of salt when they talk about their company’s future opportunities, but Huang’s estimate is consistent with analysis by respected research firms. How long it will take for the technology to mature to a point where it can really take off is the bigger question. It may be some time before we have truly self-driving cars on the road, but lately there has been a lot of progress towards that goal. I think it’s more than possible that this market will start to explode before the end of the decade.

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Suzanne Frey, chief executive at Alphabet, is a member of the Motley Fool’s board of directors. Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a board member of The Motley Fool. Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Meta Platforms and Nvidia. The Motley Fool has a disclosure policy.

Prediction: Nvidia stock will rise over the next 5 years. Here is 1 reason why. was originally published by The Motley Fool