NVIDIA (NVDA) has been one of the most outstanding stock performers in the market over the past three years. Its share price surged from $14.61 (adjusted for stock splits) at the end of 2022 to $186.50 by the end of 2025, marking an increase of nearly 1200% in three years. Although replicating such astonishing growth in the next three years may be difficult, its investment value can still be assessed by analyzing its competitive advantages and industry prospects.
NVIDIA has established a leading position in the field of artificial intelligence infrastructure. Its graphics processing units (GPUs) are the core hardware for training large language models and running AI inference, but the company’s moat extends far beyond chip manufacturing—it encompasses the complete ecosystem built around its chips. This ecosystem begins with the CUDA software platform. NVIDIA initially created CUDA to expand the use of GPUs beyond video game graphics rendering, and by promoting it to universities and research laboratories, it became a foundational tool for early AI research. As a result, a generation of programmers has been trained on CUDA, much of the foundational AI code is written based on CUDA, and even mainstream AI frameworks like PyTorch are deeply optimized for CUDA.
In addition to software, NVIDIA has also built a powerful networking platform. Its proprietary NVLink interconnect system allows GPUs to communicate directly, enhancing computing power collaboratively. Through the acquisition of Mellanox, NVIDIA further integrated networking and data processing unit (DPU) technologies.
Management at TSMC, the world’s largest chip manufacturer, predicts that the demand for AI chips will grow at a compound annual growth rate of approximately 40% in the coming years. Despite competition from custom AI application-specific integrated circuits (ASICs), NVIDIA is expected to maintain growth at least in line with the overall market, leveraging its dominant market position and its faster-growing networking business. The market widely anticipates that NVIDIA’s revenue for the current fiscal year (ending in January) will reach $213.3 billion. If revenue grows at a compound annual growth rate of 45%, by 2028 (i.e., fiscal year 2029), its revenue could reach approximately $650 billion.
Building on this, assuming the company’s adjusted operating expenses increase by an average of 7% per quarter, gross margins remain around 73%, and applying a 15% tax rate, NVIDIA’s adjusted earnings for 2028 could exceed $362 billion. Based on the current share count of 24.3 billion shares, earnings per share would be close to $15. If revenue grows by 35% in fiscal year 2030, adjusted earnings per share would exceed $20. Estimating a forward price-to-earnings ratio of 20 to 25 times for fiscal year 2030, the share price could be in the range of $400 to $500 three years from now.
In summary, NVIDIA’s share price still has the potential to double or achieve even higher growth over the next three years. Based on its ecosystem advantages and industry growth momentum, the current price level remains an attractive investment opportunity.
