Prediction: This Artificial Intelligence (AI) Stock Will Be Worth $10 Trillion in 5 Years

Key Points

• This particular player reached a huge milestone a couple of months ago.

• This tech company holds a key role in the development and use of AI.

• 10 stocks we like better than Nvidia ›

Artificial intelligence (AI) has clearly been driving growth for a number of companies over the past few years. The technology promises to change the way many things are done and, as a result, supercharge companies' businesses and lower costs. Certain players are already winning in this field, either creating AI tools and services or applying such AI to their daily operations.

This has resulted in billions of dollars in revenue for some, as well as increased efficiency and lower costs. Investors have appreciated this, sending many of these AI companies to new highs, with stocks gaining in the triple and quadruple digits over the past few years. And this has also shaken up the rankings of companies by market cap, as AI-focused players have seen their market value take off.

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In fact, a couple of months ago, one of these companies reached an enormous market cap milestone -- one that no other company had ever reached before. Now, my prediction is that this AI player will continue to head higher and be worth a whopping $10 trillion in five years. Let's dive into this exciting AI growth story.

Image source: Getty Images.

Driving crucial AI tasks

This company has taken the tech world by storm in recent years, becoming the world's No. 1 AI chip designer. I'm talking about Nvidia (NASDAQ: NVDA). Chips are key, as they drive the most crucial of AI tasks, and this tech giant's graphics processing units (GPUs) -- or AI chips -- are the most powerful on the planet. And customers aiming to win in AI have taken notice. They've scrambled to gain access to as many Nvidia GPUs as possible to run their projects, resulting in enormous revenue growth for Nvidia.

The best illustration of this is to compare Nvidia's annual revenue of $27 billion just two years ago with the latest full year, during which revenue climbed to more than $130 billion.

Investors have recognized this, with Nvidia stock soaring more than 1,100% over the past three years. This helped the company reach the major market cap milestone of $4 trillion a couple of months ago. It became the first to reach this level, securing its spot as the world's biggest company. In fact, it's continued to progress to $4.3 trillion, and giants Microsoft and Apple remain under the $4 trillion mark, at least for now.

NVDA Market Cap data by YCharts.

Why do I think Nvidia could reach $10 trillion from here? The company predicts that AI infrastructure spending may increase to as much as $4 trillion by the end of the decade. Nvidia, as a supplier of the most sought-after chips and related products, may garner a great deal of this business. In the past, the company has taken about 25% of data center spending -- that could imply $1 trillion in revenue for Nvidia. As Nvidia's revenue has climbed in the past, so has its share price and market value. And that's likely to happen again.

The path to $10 trillion

Now, let's consider how Nvidia could make it to the $10 trillion level in five years. To maintain its current price-to-sales ratio of 26, Nvidia would have to generate sales of about $380 billion in 2030. Analysts expect Nvidia to bring in $200 billion in sales this year, implying a compound annual growth rate of about 14% over the coming five years. This is clearly achievable considering Nvidia's track record of revenue growth, forecasts for AI spending ahead, and leadership position in the market.

Even if Nvidia's growth slows from current levels -- revenue climbed 56% in the latest quarter -- and AI spending comes in somewhat lower than today's projections, Nvidia remains well positioned to meet my market value prediction.

Does this mean anything in particular for you as an investor? As Nvidia grows in market value, it's a reflection of the company's strength, but a growing market cap isn't the reason to buy a particular stock. Instead, look to Nvidia's revenue patterns, demand for its chips, and innovation plans. These offer us a great reason to get in on this top AI stock.

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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.