NVIDIA (NASDAQ:NVDA) has been one of the best stocks to own for the last several years as its GPUs have powered the rise of widespread AI. One question that’s on the minds of many investors at the moment, though, is whether NVIDIA can keep climbing as the declining hype around AI calls the valuations of many leading tech stocks into question.
Today, let’s look at the chip giant’s growth prospects over the next several years to see how high NVIDIA stock could eventually go.
NVIDIA’s Valuation Is It High?
One of the first things to understand about NVIDIA’s long-term prospects is the fact that the stock already commands a high valuation that could put a drag on its future upside. Despite being the most valuable business in America with a market cap of over $4 trillion, shares of NVDA are still trading at 45.2 times earnings and 58.0 times operating cash flow.
Even so, most analysts are convinced that NVIDIA could still offer investors substantial upside. The average price target for the stock is $248.42, suggesting over 35 percent worth of upside from the most recent price of $182.55. NVDA is also still rated overwhelmingly as a buy, with 50 buy ratings, 3 hold ratings and just a single sell rating.
Can NVDA Keep Defying Market Gravity?
One of the biggest short-term questions about NVIDIA is whether or not the stock can hold on to its high valuation in a market that is growing increasingly wary of a bubble forming around AI stocks. Up to now, NVIDIA has not only managed to hold the line but also drag much of the rest of the market along with it. With fears of overvaluation mounting, however, NVIDIA may or may not be able to keep its winning streak up indefinitely. Indeed, a decline of 4.5 percent in NVDA shares over the last month may suggest that the market is already nearing the edge of how highly it’s willing to value NVIDIA.
It’s also worth noting that many prominent investors appear to be skeptical of NVIDIA’s ability to maintain its valuation. Michael Burry, famous for his short-selling ahead of the 2008 financial crisis, recently shorted both NVIDIA and Palantir on the assumption that ballooning AI valuations are likely unsustainable. Billionaire Stanley Druckenmiller has evidently reached a similar conclusion, selling his previously large stakes in both businesses off entirely.
NVDA Revenue Growth Catalyst
While NVIDIA could face substantial short-term volatility as a result of its high valuation and the market’s growing skepticism around AI stocks, it’s also worth noting that there could be very large long-term growth catalysts behind the business. Demand for AI chips is still extremely strong, and NVIDIA’s own guidance for Q4 calls for revenue rising to $65 billion. For reference, Q3’s revenue total was $57 billion, itself a 22 percent increase over the year-ago period.
Much of NVIDIA’s growth over the next several years will be driven by ongoing CapEx on data centers, which could rise to as much as $4 trillion by 2030. Because of its rapidly evolving GPU technology, NVIDIA will even likely have ongoing opportunities to replace its own chips in existing data centers as both demand and computing power keep rising.
NVIDIA may even prove to be one of the winners of the extremely young and deeply volatile quantum computing world. While smaller startups and even large tech giants are betting on building their own quantum hardware, NVIDIA is developing the tools needed to make hybrid quantum-classical computing realistically useful. This sort of bridge between classical and quantum computing is not only more likely to become commercially viable in the short term but also could position NVIDIA as a pick-and-shovel play on quantum computing in a similar way to what it has achieved in AI.
All told, NVIDIA’s earnings per share are expected to grow at a compounded annual rate of over 35 percent through the next several years. This would actually represent a slowdown for NVIDIA, as year-over-year EPS growth has only come in below that level in one quarter during the last year.
How High Could NVDA Realistically Go?
Right now, NVIDIA’s price is driven by a delicate balance between extremely strong earnings growth and a premium valuation that is difficult for most businesses to maintain over time. In the short term, this could lead to substantial volatility and a wide range of different outcomes. With a strong Q4 expected and high earnings premiums holding among the Magnificent Seven for the time being, though, it seems at least possible that prices of $225-$250 per share could be feasible within the next 12 months.
Looking further down the line, it’s probable that ongoing earnings growth will run up against an eventual valuation contraction. Even this, however, could still leave considerable room for higher share prices. Suppose, for example, that NVIDIA’s per-share earnings grow at the expected rate for five years, during which time its P/E ratio drops to the current sector average of 23.3.
Starting from the current trailing 12-month EPS of $4.04, the current projected growth rate could see the business earning as much as $19.80 per share in five years’ time. Even accounting for a P/E drop to the current market average, this would put shares of NVIDIA at over $460, more than 2.5 times the current price. It’s worth noting that even this rather positive result may be on the low end, as NVIDIA’s P/E would have to be cut very nearly in half to reach the current sector average.
It’s also worth acknowledging that there are significantly more bullish views on NVIDIA out there. Some observers believe that NVDA could rise to $1,300 or more within the next five years. While certainly not impossible, these extremely optimistic views may rest on best-case growth outcomes and may not leave room for valuation ratios to contract if the growth outlook slows beyond the 5-year mark or if the market’s view of the value of AI weakens.
All told, it currently appears likely that NVIDIA could have significant upside in both the immediate and long-term futures. Expectations of a strong Q4 will likely keep prices elevated going into 2026, and the business’s ongoing earnings growth could drive the stock to significantly more than double during the next five years. While there’s still a reasonably high chance of volatility, NVIDIA looks like it could still be a good stock to buy and hold for long-term compounding gains.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.