Prediction: $1,000 Invested in Nvidia Today Will Be Worth This Much by 2030

Nvidia (NASDAQ:NVDA) is the most valuable company in the world, but that doesn't automatically mean it's expensive. The tech giant's revenue more than doubled year-over-year in its latest quarterly report, but the stock trades for less than 20 times forward earnings. That's significantly less than the valuation of the average S&P 500 stock.

Of course, Nvidia's top line isn't going to keep doubling every year. The numbers simply become too large. But there could be a surprising amount of upside ahead.

My prediction for Nvidia

There's no way to make a multi-year prediction for any company without making some big assumptions, and Nvidia is no exception. But let's keep this conservative.

Image source: Getty Images.

We'll assume for the sake of this article that Nvidia's earnings grow at an average rate of 15% over the next four years. This would allow for a significant slowdown in AI spending growth and put Nvidia's earnings at about $21 per share in 2030, based on expected forward earnings. .

Let's say that at that point, Nvidia trades for 20 times earnings, which would be very reasonable for a company whose earnings growth settles at around 15%. This would give the company a stock price of $420 per share.

Nvidia trades for about $234 per share as of this writing, so with $1,000, you could buy approximately 4.3 shares of the stock. A share price of $420 would mean that a $1,000 investment could be worth about $1,800 in 2030.

A lot could go wrong (or better than expected)

This is just a prediction of my base case for Nvidia stock over the next four years. It's worth emphasizing that AI infrastructure spending is tough to predict and likely won't grow in a straight line. Some of Nvidia's customers are designing their own chips, and the company has strong competitors whose recent products pose serious monitoring risks. On the other hand, I was deliberately conservative with my assumed growth rate, so even if some things go wrong, Nvidia would likely be able to maintain 15% annualized growth unless the AI boom completely fizzles out.

We'll see Nvidia's latest numbers in mid-November, so we should get a better sense of how demand is holding up. But the bottom line is that Nvidia doesn't need to keep growing at the current pace in order to be a solid investment from here. In a conservative scenario, there's a strong case to be made that Nvidia could nearly double by 2030.

Matt Frankel, CFP® has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.