Shares of chipmaker Nvidia(NASDAQ: NVDA) have been one of the clearest ways to play the artificial intelligence build-out. And investors who foresaw this have profited. The stock is up more than 750% over the past three years as companies turned to Nvidia to power their AI plans.
Nvidia’s business momentum remains extraordinary, even today. But the hard part about investing is that a great business and a great stock are not the same thing, especially once the market has already priced in years of strong demand. In other words, Nvidia can keep executing at an impressive speed yet still deliver only ordinary shareholder returns over the next five years.
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So, where exactly could Nvidia stock realistically end up in five years?
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Nvidia’s most recent quarter showed why investors are still upbeat about the AI boom. In its fiscal third quarter of 2026 (ended Oct. 26, 2025), the AI chipmaker’s revenue rose 62% year over year to $57.0 billion. And that impressive rate was an acceleration from the prior quarter, when revenue rose 56% year over year to $46.7 billion.
Key to the quarter’s growth, of course, was its AI-focused data center business. Nvidia said data center revenue rose 66% year over year to $51.2 billion in the quarter.
“Blackwell sales are off the charts, and cloud GPUs are sold out,” said Nvidia founder and CEO Jensen Huang in the company’s fiscal third-quarter earnings release.
Meanwhile, recently announced full-year spending plans from some of the world’s biggest tech companies suggest that Nvidia’s data center momentum should persist. Amazon(NASDAQ: AMZN) said it expects to invest about $200 billion in capital expenditures across the company in 2026, explicitly pointing to AI among the drivers. Meta Platforms guided to 2026 capital expenditures (including principal payments on finance leases) of $115 billion to $135 billion. And Alphabet said its 2026 capital expenditures are anticipated to be in the range of $175 billion to $185 billion.
Those budgets, of course, aren’t comprised entirely of dollars going to Nvidia. But they are a clear signal that hyperscalers are still aggressively building capacity, and GPUs remain a central input to that build-out.
So, in the short term, Nvidia should continue to see explosive business growth.
The longer-term question is not whether AI is here to stay. It most certainly is. The more pertinent question is what the AI hardware market looks like once the initial capacity land-grab cools.
Additionally, one pressure point is that Nvidia’s customers are incentivized to reduce their dependence on any single supplier. Some are already scaling internal silicon programs. Amazon, for example, recently highlighted momentum in its custom chips and said Trainium and Graviton have a combined annual revenue run rate of over $10 billion, growing at a triple-digit year-over-year rate. Programs like this could lead to Nvidia’s pricing power softening over time.
Further, Amazon is explicitly focused on bringing prices down for AI chips.
“Customers are starving for better price performance,” said Amazon CEO Andy Jassy in the company’s fourth-quarter earnings call.
None of this is to say Nvidia will not be a strong business five years from now. But it is a high-risk stock operating in a fast-changing part of the market, and the outcome range is wide. If AI spending normalizes, if competition closes some of the performance gap, or if large customers keep scaling with in-house built alternatives, Nvidia can still grow, but at a slower rate (though probably not until Nvidia benefits from another year of blistering growth, first).
In short, I believe Nvidia’s business continues to grow nicely, but its pricing power erodes over time as customers push harder on cost and alternatives mature. That combination can still deliver returns of 10% to 12% annually, but investors should not expect a repeat of the last few years.
How does that work out for the stock?
The math is simple: Starting from about $188 per share today, 10% annual compounding over five years implies a stock price of about $303. At 12%, it is about $331.
That is a solid outcome, especially given that it’s from a premium valuation, as shares trade at about 47 times earnings today.
I would treat Nvidia as a business that can keep doing well, but one where the next five years are more likely to look like normal compounding than another once-in-a-cycle surge. If you own it, the key is sizing and expectations — because the biggest risk is that the industry changes faster than the market’s optimism does.
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Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.
