Why Nvidia Stands as a Sure-Fire Bet to Become The World's Most Valuable Stock

Thanks in major part to its strategic play inside the generative AI space, it’s safe to say that Nvidia's (NASDAQ: NVDA) stock performance in 2024 was, in the worst case, amazing.

In just the first quarter of 2024, Nvidia's stock price increased by 82.5%, making it one of the best performers on the S&P 500 as the AI boom drove unprecedented growth. This gain was supported by a staggering 265% rise in annual revenue, proving the company's leadership in the AI-driven industry.

As expected, Nvidia's potential has captured the attention of both analysts and investors. This is due in part to the growing need for its GPUs, which are essential for AI applications in a wide range of industries.

Due to this demand, Nvidia has been able to surpass earnings forecasts and greatly increase its market valuation. Surprisingly, in mid-2024, it temporarily reached a valuation of $3.34 trillion.

Source: ycharts.com. Nvidia's market cap throughout the time

Going forward, Nvidia's strategic future initiatives and current success are the main sources of enthusiasm surrounding the company. Nvidia is in a strong position to continue its current growth trajectory and could emerge as the most valuable stock in the world thanks to new products and technologies that aim to improve AI capabilities.

Nvidia Carries On Innovating and Expanding Its Offers

Moreover, the company's latest presentations and product releases demonstrate its significant focus on incorporating artificial intelligence (AI) into various applications and industries.

For instance, Nvidia showcased a range of cutting-edge products, including RTX AI laptops and Project G-Assist, an AI assistant designed for PC games and applications, at events like Computex 2024.

Nvidia is also making significant progress in the implementation of AI in enterprise settings. Having said that, businesses are expected to increasingly utilize generative AI to extract valuable information from unstructured data. Ultimately, this will involve constructing customized large language models (LLMs) that offer actionable insights and improve decision-making in various industries.

In addition, Nvidia is partnering with leading industry partners to develop AI-enhanced virtual humans and advanced AI-powered systems. This encompasses collaborations to seamlessly incorporate AI capabilities directly into commonly utilized operating systems and applications.

Maxim Manturov, head of investment research at Freedom24, says, “Nvidia's recent reaching of a market capitalization of $3 trillion has sparked a heated debate over its valuation and prospects.

Nvidia's rapid growth, up more than 210% over the year, underlines its key role in the technology sector, particularly in graphics processors and artificial intelligence technologies. The company's strategic achievements in hardware, highlighted by the Hopper, Blackwell, and Rubin series, are seen as contributing to a significant increase in market share in key segments. This success has contributed significantly to its current valuation.

According to the analysis, Nvidia's future growth depends not only on hardware sales, but also more on the software business, especially the CUDA platform. CUDA enjoys widespread adoption among developers using Nvidia's artificial intelligence-enabled GPUs, making it a critical tool in the development of large-scale AI models and applications. The software segment offers the potential for recurring revenue streams, thereby potentially stabilizing Nvidia's revenue profile.

Looking ahead, forecasts suggest that Nvidia could continue its upward trajectory, potentially reaching a valuation of $10 trillion by 2030. This ambitious target reflects expectations of sustained growth in both the hardware and software segments, with CUDA playing a key role in expanding market reach and strengthening its presence. competitive advantage.”

Most Analysts Agree That Nvidia is a Right Buy Case

With multiple upgrades and upbeat price targets, analysts' predictions for Nvidia's stock performance in the future are largely positive.

For example, Goldman Sachs and Loop Capital analysts continue to maintain strong buy ratings with large price targets raised, indicating their confidence in Nvidia's development trajectory, especially with regard to sales of data centers and AI applications.

More precisely, the average 12-month price target among Wall Street analysts is around $130.88, with projections ranging as high as $200.

Source: stockanalysis.com. Nvidia stock forecast.

Since large language models (LLMs) and other AI-driven applications depend on Nvidia's GPUs for training, analysts predict that demand for the company's GPUs will remain strong.

This is particularly true for the data center and AI industries, which, in the upcoming years, will probably increase Nvidia's profitability and revenue growth dramatically.

All in all, we may safely say that the consensus is clear. Because of its continuous innovation, robust market demand for GPUs, and growing software ecosystem — especially related to its CUDA platform — Nvidia has indeed the potential to become the most valuable stock in the world.

With an expected steady revenue growth and profitability, especially from AI-driven applications and data centers, the company's future valuation will mostly follow its great prospects.