Key Points

Shares of Nvidia (NASDAQ: NVDA) have been impacted by several factors, including increasing macroeconomic uncertainty, geopolitical tensions, ongoing tariff wars, export controls, and rising competition from Chinese companies in the past few months.

However, the recent earnings performance -- including its recent impressive result in the fiscal first quarter of 2026 -- demonstrates why investors should not let the short-term noise distract them from the company's long-term growth prospects.

Nvidia's first quarter fiscal 2026 earnings performance (ending April 27) validates its position as the clear leader in the artificial intelligence (AI) -powered hardware, software, and infrastructure services market. Revenue soared 69% year-over-year to $44.1 billion, while data center revenue surged 73% year-over-year to $39.1 billion in the first quarter.

These tailwinds can propel Nvidia's market value to over $5 trillion in the next decade.

Leadership in AI hardware

Nvidia's dominance in the AI chip market, where it still controls a more than 80% share, should remain unchallenged at least for the next few years. The company's latest Grace Blackwell 200 (GB200) graphics processing units (GPUs) enable organizations to run computationally heavy reasoning AI models with 25 times higher performance and at a twentieth of the cost of Hopper H100 chips.

The Blackwell ramp-up has been the fastest product launch in Nvidia's history and accounted for nearly 70% of data center compute revenues in the recent quarter. Major hyperscalers are already deploying nearly 72,000 Blackwell GPUs weekly across their data centers and are planning to further ramp output in this quarter.

Furthermore, Nvidia is sampling GB300 systems at major cloud service providers and expects production shipments to commence by the end of the second quarter. While these systems have the same architecture, physical footprint, and mechanical and electrical specifications as GB200, they offer 50% more high-bandwidth memory capacity and a 50% increase in inference computing performance. Hence, cloud service providers can transition from GB200 to GB300 systems while benefiting from higher performance

Software ecosystem

Nvidia's software ecosystem has also become a strong moat, ensuring that customers will find it prohibitively costly to switch to competitors' chips. The company's comprehensive CUDA parallel programming platform is currently used by 5.9 million developers to accelerate GPUs for various general-purpose applications effectively. CUDA is currently used to accelerate all AI models and over 4,400 applications. Subsequently, CUDA helps prevent significant infrastructure investments from becoming obsolete in an exceptionally fast-evolving market.

Additionally, the company launched its TensorRT software package for inference (real-time deployment of trained AI models) optimization and the TensorRT-LLM software library to ensure the fast and efficient running of large language models.

Strategic partnerships

Nvidia partnered with Humain, a newly launched AI company owned by Saudi Arabia's Public Investment Fund, to build AI factories with 18,000 of its latest GB300 Blackwell chips in the first deployment phase. Nvidia is also playing a key role in the Stargate Project, through which OpenAI, SoftBank , and Oracle have said they plan to invest $500 billion into U.S.-based AI infrastructure over the next four years.

These strategic alliances could be significant growth catalysts for Nvidia in the long run.

How can Nvidia reach a $5 trillion valuation by 2035?

In its fiscal 2025, which ended Jan. 26, the chipmaker's revenues grew by 114% to $130.5 billion. While analysts are projecting lower revenue growth rates for future years, the consensus expectation is still for the company to grow quickly. Nvidia's revenues are forecast to increase by 52.8% and 23.9% in its fiscal 2026 and fiscal 2027, respectively. And the company's already off to a good start by recording 69% revenue growth in Q1 of fiscal 2026.

In that context, it is reasonable to expect Nvidia to grow at a compound annual rate of nearly 20% over the next decade. If it does, it would wind up with about $808 billion in revenues in its fiscal 2035.

Nvidia reported an exceptionally high net income margin of 55.8% in its fiscal 2025. The company has been able to steadily expand its margins in the past couple of years, largely due to its dominance in the AI market. Even if we assume that it will have to accept some margin contraction due to increasing competition and scale, it is reasonable to expect it to produce a net income margin of nearly 27.9% -- its 10-year median margin -- in fiscal 2035. With a top line of $808 billion, that would give it a net income of around $225 billion that year.

Nvidia is trading at around 32.6 times forward earnings. Analysts have projected 5-year forward P/E multiple of 23.5x for Nvidia. Assuming this valuation multiple for the next 10 years , the company can reach a market value of $5.29 trillion by 2035.

Hence, the company is well positioned to cross the $5 trillion market capitalization, even under conservative expectations. There are reasons to suspect its market value could grow even higher, too -- consider Nvidia's upcoming AI initiatives, such as Sovereign AI, agentic AI, and physical AI.

Other growth catalysts

Nvidia is also benefiting from the increasing demand for high-performance chips in gaming and AI PCs. Gaming revenue rose 42% year-over-year to $3.8 billion in the first quarter, driven by strong adoption of Blackwell architecture systems from gamers, creators, and AI enthusiasts.

Enterprise AI is also becoming a significant growth catalyst, with Nvidia bringing AI-powered storage, computing, and networking capabilities directly to corporate environments. The company's RTX Pro, DGX Spark and DGX Station enterprise AI systems are targeting the $500 billion market opportunity. Nvidia's Omniverse and robotics platforms are also powering factory automation and humanoid robotic systems.

With all that in mind, long-term investors should consider picking up at least a small stake in Nvidia to profit from the AI wave over the next decade.

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