Could Nvidia stock (NASDAQ:NVDA) reach $300 in the next two years? There’s a strong possibility. How? Consider this, just about three months ago, at the end of April 2025, Nvidia stock was trading at around $95 levels and presently trades at close to $174 per share. The stock is also up roughly 4x over the past two years. Let’s look at valuations. Nvidia stock trades at about 40x consensus FY’26 earnings. Is this pricey?Not really. Especially if you consider the company’s steadily expanding earnings, the long-growth runway for the artificial intelligence market, and Nvidia’s formidable lead in the accelerated computing market. And if AGI (Artificial General Intelligence) becomes even partially realized over the next few years, the demand for high-performance computing could soar exponentially. In the scenario below, we use Nvidia’s revenues, profitability, and valuation multiples to demonstrate a potential path to a $300 stock price.
Nvidia CEO Jensen Huang delivers a keynote address at the Consumer Electronics Show (CES) in Las … More
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More Demanding Workloads, AGI Can Drive Revenue
Nvidia’s revenues grew by almost 2x over the last 12 months, while posting an average annual growth rate of about 69% over the last three years, and the momentum can hold up. If Nvidia grows its sales at an average annual rate of over 60% for the next two years – its revenues could move from around $131 billion in FY’25 to around $334 billion by FY’27 or over 2.5x.
There are several trends that could drive continued growth. While the initial AI models deployed by the likes of OpenAI in 2022 were largely text-based, models are increasingly multimodal, working with speech, images, video, and 3D calling for higher computing power and a larger number of GPU shipments. Besides this, Nvidia recently indicated that it received assurances from the Trump administration allowing it to resume sales of its H20 artificial-intelligence chip to China after facing a ban around April. This marks a significant win for the company, as it preserves access to a major and fast-growing AI market.
More importantly, AI is expected to evolve from its current form – writing text, generating images – to more general intelligence. While the timeline is not certain, the goal is to get AI to reason, plan, learn new tasks without retraining. Artificial General Intelligence (AGI) could conduct scientific research, generate novel insights, or design entire products on its own. This could unlock breakthroughs and innovations across industries and some models suggest this could push global GDP growth from low single digits to over 20% annually. ((The Economist)) As the world moves closer to AGI, Nvidia could stands to benefit enormously. AGI systems are expected to require massive computational resources to train and run, considerably exceeding today’s models, and Nvidia’s GPUs are currently the industry standard for powering such workloads. AGI could not just be the next industrial revolution, it could be much bigger and Nvidia’s chips could be right at the heart of it.
Now the stock markets are often myopic and tend to extrapolate short-term trends for the long run. In Nvidia’s case, the assumption is that demand growth and pricing power will hold up and profits will remain sizable as the generative AI wave advances. However, there are multiple risks and there remains a real possibility that the stock could see a sizable correction. We detail this possibility in our analysis of Nvidia Stock To Crash In 2025? Indeed we believe this broad range of upside and downside potential represents a simple fact: Nvidia is a volatile stock.
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Net Margins Will Remain Thick
Combine this solid revenue growth with the fact that Nvidia’s margins (net income, or profits after all expenses and taxes, calculated as a percent of revenues) are on an improving trajectory – they grew from levels of about 25% in FY’19 to over 51% in FY’25 as the company witnessed better economies of scale and a more favorable product mix skewed toward complex data center products. Software-related sales are also trending higher. We can assume that margins will remain flat at current levels as Nvidia’s launch of pricier higher-end products such as the latest Blackwell chips are offset by potentially higher costs and competition in the lower-end of the market from the likes of AMD. With margins remaining flat and revenue rising 2.5x, we could see earnings rise 2.5x. Looking for an alternative AI play: Could AI contender AMD see a lift ahead of earnings?
Strong Results Could Mean Earnings Multiples Hold Up
Now, if earnings grow 2.5x, the PE multiple will shrink by 2.5x to levels of about 16x, assuming the stock price stays the same. But that’s exactly what Nvidia investors are betting won’t happen. If earnings expand 2.5x over the next few years, instead of the PE shrinking from a figure around 40x now to about 16x, a scenario where the PE metric stays at about 28x looks quite likely. For perspective, Apple – a company that is growing at low single-digits – trades at 30x. This would make the growth of Nvidia’s stock by 1.7x within the next two years or so a real possibility, translating into a price of over $300 per share. What about the time horizon for this high-return scenario? In practice, it won’t make much difference whether it takes two years or three, as long as Nvidia is on this revenue expansion trajectory, with margins holding up, the stock price could respond similarly.
While Nvidia stock could have massive upside, it comes with risks and considerable volatility. On the other hand, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.