Here's What $5,000 Invested in Nvidia Stock Could Be Worth by the End of 2030

Nvidia (NASDAQ: NVDA) is the leader in AI infrastructure, and it remains well positioned to be one of the biggest beneficiaries of the ongoing data center build-out over the next few years. As long as the tech sector's spending on new compute capacity continues to increase, Nvidia should turn in strong growth, and the stock should perform well. At today's price, a $5,000 investment would buy you about 22 shares.

Currently, all signs point to continued strong AI infrastructure capital expenditures over the next several years. JPMorgan Chase has projected that AI infrastructure capex will reach a whopping $1.4 trillion a year in 2030, while hyperscalers like Amazon, Alphabet, and SpaceX have all discussed the quick paybacks they are getting on their chip investments. Notably, graphics processing units (GPUs) have useful lifespans of about six years, so Nvidia should also benefit from a pretty predictable replacement cycle.

Let's explore where a $5,000 investment in the semiconductor stock could be in about four years.

A lot of potential upside ahead

Analysts currently project that Nvidia's revenue will grow from $411.7 billion in its fiscal 2027 (which ends in January 2027) to nearly $1.2 trillion in its fiscal 2031 (which ends in January 2031). Its adjusted earnings per share (EPS), meanwhile, are forecast to rise from $9.31 this fiscal year to $28.79. If you expect that it will at that point be trading at a price-to-earnings (P/E) ratio in the range of 15 to 20 -- not an unreasonable level -- that would give it a stock price of between $432 and $575, representing roughly 90% to 150% upside. That would result in a 22-share position being worth between $9,500 and $12,650 by the end of 2029.

Image source: The Motley Fool.

However, Nvidia has consistently outpaced analysts' estimates by large margins over the past several years, and I think it has the potential to keep doing so.

To estimate how Nvidia could grow over the next four years, I have modeled its revenue growth to gradually slow from its current pace while its expenses rise 11% sequentially. I also project that its gross margins will gradually step down to approximately 70%, and I'm applying a 15% tax rate to its operating income. I also anticipate the company reducing its diluted outstanding share count by 2% a year through stock buybacks, which is a sensible capital return strategy given its strong free cash flow.

All this would lead to Nvidia generating over $1.9 trillion in revenue in its fiscal 2031 and adjusted earnings of around $979 billion, or almost $41.50 per share.

Below is a simple model of what its revenue and earnings growth could look like. All figures below are my own projections.

Data source: Author's projections.

If we apply a P/E multiple in the 15 to 20 range to my projection for Nvidia's fiscal 2031 earnings, the stock would at that point trade between $620 and $830, representing approximately 175% to 270% potential upside. That would bring the value of 22 shares to between $13,640 and $18,260.

Nvidia has a lot of potential upside from both earnings-per-share growth and possible multiple expansion given its still-cheap valuation, which currently sits at a forward P/E of below 14.5, based on fiscal 2028 earnings expectations. While hyperscalers are likely to continue diversifying their AI chip supply chains and using more custom silicon, I think the biggest potential headwind to the stock hitting these levels would be an overall slowdown in AI infrastructure spending. That could be caused by things like supply chain bottlenecks, issues funding the build-out, or customers not seeing good returns on their investments, which so far hasn't been the case.

That said, given its potential upside, Nvidia is still a buy.

JPMorgan Chase is an advertising partner of Motley Fool Money. Geoffrey Seiler has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, JPMorgan Chase, and Nvidia. The Motley Fool has a disclosure policy.