At the beginning of June last year, I wrote an article with an identical headline, aiming to assess Nvidia’s (NASDAQ: NVDA) potential for delivering significant gains. In hindsight, my prediction fell short.
Since that article, Nvidia shares have surged by 196%, more than tripling in value. I had estimated that this semiconductor giant could nearly double in value over three years, but it far surpassed those expectations.
Let’s explore the reasons behind Nvidia’s impressive growth and consider how much more upside this high-flying chipmaker might achieve after its remarkable performance over the past year.
Nvidia’s Growth Surpasses Wall Street’s Expectations
A year ago, analysts projected Nvidia would generate $42.9 billion in revenue and $7.68 per share in earnings for fiscal 2024. Instead, the company closed the fiscal year with adjusted earnings of $12.96 per share on $60.9 billion in revenue. Additionally, analysts had forecasted $50.6 billion in revenue for fiscal 2025 and $62.7 billion for fiscal 2026.
As the following chart shows, analysts’ expectations for Nvidia have soared over the past year.
This is unsurprising, given Nvidia’s consistent overperformance each quarter, driven by the enormous demand for its artificial intelligence (AI) chips. For instance, in the first quarter of fiscal 2025 (ending April 28), Nvidia’s revenue skyrocketed 262% year-over-year to $26 billion, while earnings surged 461% to $6.12 per share.
Such robust growth has prompted analysts to further elevate their projections for the company. Nvidia CEO Jensen Huang attributes this stellar growth to ongoing partnerships with companies and countries, aimed at transforming traditional data centers into AI factories, thereby creating a new type of data center.
Nvidia’s pivotal role in AI proliferation, through its hardware and software offerings, is noteworthy. The company held an overwhelming 94% share of the AI graphics processing unit (GPU) market last year and faces minimal competition despite efforts from rivals. With the global GPU market expected to grow annually by 31% through 2032, reaching $594 billion in revenue, Nvidia has ample opportunity for continued robust growth in the long term.
