Nvidia Believes Artificial Intelligence (AI) Capex Will Reach $3 Trillion to $4 Trillion by 2030. Here's Where Its Stock Price Could Go If It's Right.
Yahoo Finance ·
Nvidia ( NVDA 1.39% ) is the world's largest company by market cap, and many investors are a bit worried that its stock may have reached a point where it can't grow fast for much longer. I think that's just not true, and expect that several tailwinds will push the stock to new heights over the next few years. The biggest of those tailwinds is the tech sector's soaring spending on the data center build-out. If this trend keeps up as Nvidia projects, then it should be a great stock to own in the coming years. On multiple occasions, Nvidia has made the bold assertion that global data center capital expenditures will reach $3 trillion to $4 trillion annually by 2030. For reference, the big four AI hyperscalers plan to spend around $650 billion on capex this year. That total doesn't include companies like OpenAI, Anthropic, xAI, or anything in China. So, the figure for the data center sector as a whole is likely several hundred billion dollars more. Next year, Nvidia expects the hyperscalers to spend around $1 trillion. It likely already has many of the orders for the AI processors they want on hand, giving it a privileged degree of insight into the pace of the growth trend. Additionally, suppliers like Taiwan Semiconductor Manufacturing have already told investors to expect major growth for several more years, which is why they are spending big on increasing their production capabilities this year. One of the AI hyperscalers, Alphabet , told investors during its Q1 conference call that they should expect "significantly" higher capital expenditures in 2027 than the $180 billion to $190 billion it plans to spend in 2026.
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