It will be Wall Street’s first trillion in stocks

It will be Wall Street’s first $5 trillion in stocks

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  • AI data center capital expenditures continue to skyrocket.

  • Nvidia knows its customers’ spending plans in advance.

  • Its stock could be a huge winner over the next five years.

  • 10 Stocks We Like Better Than Nvidia ›

Wall Street has never seen a $5 trillion stock. However Nvidia (NASDAQ: NVDA) is coming up big and is hovering around a $4.5 trillion market cap. Less than a decade ago, Wall Street had never seen a $1 trillion company, so this huge rise from a company that was valued at around $14 billion a decade ago is simply incredible.

I think Nvidia will be the first company to cross the $5 trillion mark Apple and Microsoft to the impact. However, there is concern about the creation of an artificial intelligence (AI) bubble. Could this stop this giant from reaching that milestone?

Image source: Getty Images.

Nvidia makes graphics processing units (GPUs), which are typically used to process workloads that require a lot of computing power. GPUs were invented to process game graphics, but eventually found use in other fields such as engineering simulations, drug discovery, and cryptocurrency mining. Artificial intelligence workloads have been the biggest use case for GPUs so far, and it doesn’t look like it’s going to slow down anytime soon.

Nvidia co-founder and CEO Jensen Huang commented during the company’s second-quarter earnings call that he expects AI data center capital spending to increase from $600 billion. USD in 2025 up to $3 trillion to $4 trillion in 2030

However, investors need to understand that these AI data centers are planned several years in advance. Artificial intelligence hyperscalers must obtain permission from various municipalities to build them, ensure electricity and other utility needs, build a site and then fill them with chips from companies like Nvidia.

This means that all of the massive AI data centers announced this year will take several years before Nvidia’s chips are up and running. This requires hyperscalers to contact Nvidia years before they actually need the GPUs, giving Nvidia a valuable look into the future.

With that in mind, investors need to start thinking about where Nvidia could go if its projection fizzles.

If Nvidia’s forecast of $3 trillion to $4 trillion in data center capital spending comes to fruition, it will have plenty of room to run. Wall Street analysts predict that Nvidia in 2026 fiscal year (ending January 2026) will earn about $206 billion. USD revenue, which is about a third of the total data center capital expenditures that Nvidia expects to make in 2026. If we reduce this share to 25% by 2030 and we’ll use the lower end of the overall spending forecast, that would mean revenues could be as high as $370 billion. USD.

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