Nvidia Stock Set for Significant Gains Amid AI Boom

Nvidia's stock has been relatively flat this year with a 17.3% gain so far, but its growth potential is still high due to its dominant position in artificial intelligence (AI) and its ability to capitalize on emerging trends.

The company recently gave a full-year-ahead forecast for the first time, calling for approximately 70% revenue growth, which is well above what Wall Street had been modeling. This growth is not demand-constrained but supply-constrained due to memory shortages and other critical component bottlenecks in building AI factories.

Nvidia's next-generation Vera Rubin platform will allow it to capture even more of the large hyperscalers' budget, and its ACIE customers are growing faster than expected. New use cases such as agentic AI workloads and space exploration are also driving demand for Nvidia's products.

The company's earnings power is large enough to produce a very different stock price even if its valuation multiple doesn't expand at all. Applying a 25x forward P/E multiple to the estimated $15.52 EPS in fiscal 2028 puts Nvidia's stock at around $388 per share, while an expanded multiple could push it closer to $512.