Jensen Huang Said Compute Equals Revenue. Nvidia Can Easily 3x If He’s Right

AI earnings have caught up and then some, with stocks like Nvidia (NASDAQ:NVDA | NVDA Price Prediction) no longer being overpriced against fundamentals. If anything, these stocks might even be underpriced. And if you listen to AI hardware CEOs, you might change your mind about these stocks.

Many of them are reinforcing their income statements and have more demand than they can deal with. Thus, you’re seeing both profits and revenue surge. This isn’t the case with AI stocks on the software or on the data center buildout side, which have revenue growth but declining cash flow.

What I’m saying is, the AI impact on companies like Nvidia should not be minimized. Whatever you think about AI or its eventual fate, the biggest companies are pouring money into these AI hardware companies. And they’re likely to get bigger.

What if Jensen Huang is right?

Nvidia’s CEO, Jensen Huang, said one earnings call ago that “compute equals revenue”. He’s probably right at the moment since Nvidia dominates the market share, and everyone wants to buy from it.

And if he keeps being right for the coming years, Nvidia’s revenue plus profits could keep growing explosively as long as margins hold.

Global AI compute is growing at 2.25x per year and is still accelerating. This growth is expected to hold through 2030 as companies worldwide adopt AI and use it more and more. In fact, the vast majority of code and writing is now AI-generated.

Huang has stated that for every $50 billion the industry spends on AI infrastructure, Nvidia gets some $35 billion.

If he’s right, you’re going to see Nvidia’s top line cross $750 billion a year.

Is this even possible?

Goldman Sachs notes that consensus capex estimates have been too low for two years running. They estimate $765 billion in 2026. Hyperscalers have announced plans at $725 billion earmarked for this year, of which $545 billion is for AI specifically.

If you take Huang at his word that Nvidia captures $35 out of every $50 spent on AI infrastructure, that $545 billion pool alone translates to $382 billion in revenue for Nvidia from just one year of hyperscaler spending. This is actually in line with analyst estimates. They expect 81.2% revenue growth to $391.3 billion for FY 2027 (ends in January 2027).

In fact, they are looking at up to $710 billion in revenue for FY 2028. And considering Nvidia keeps beating even the wildest of expectations, that $750 billion figure could be within reach.

Where NVDA stock will go if this happens

If you asked anyone back in 2023 where Nvidia’s valuation would stand three years later, most would probably temper their expectations to $2 trillion at most if they were generous.

Would it be appropriate to carry on all the hype and outperformance to the upcoming three years? Definitely not. But if everything does go well, we could see something similarly wild.

Best-case, you’re going to see ~$800 billion in revenue once you factor in non-hyperscaler revenue.

Even though net margin has crossed 70% for the quarter, let’s take the trailing 63% net margin. In this case, you’re looking at $500 billion in net income. Once we multiply that by the current trailing earnings multiple of 33x, you get a $16.5 trillion market cap in two years.

Again, the AI rally would have to take a veeeery euphoric turn for this to happen, but the numbers are surprisingly attainable once you extrapolate the current level of AI spending and growth.