Nvidia’s Post-Split Stock Could Rise Tenfold?

When the split sends Nvidia’s stock price down to around $100 a share, I expect the company could sustain the high growth that sent its stock price soaring for years to come.

Here are three reasons its shares could again top $1,000 post-split:
- Nvidia’s great performance and prospects;
- Nvidia’s successful growth investments; and
- CEO Jensen Huang’s leadership — which could also be Nvidia’s biggest investment risk should he leave the job without a more capable successor.

The most important question a CEO must answer is: Whither future growth? For Nvidia, the key dimensions of growth are customer group and product. Here are the company’s key bets on each dimension:
- Customer group: data centers. Nvidia enjoyed a 427% increase in data center revenue — what Huang refers to as AI factories. Those account for $22.6 billion in revenue for the chip designer. Corporate luminaries — including Google, Microsoft, Meta,Amazon, OpenAI and Tesla — are among more than 100 customers purchasing GPUs from Nvidia. The quantity of those purchases ranges from hundreds to 100,000. For example, Tesla is using 35,000 H100 chips to help train models for autonomous driving.
- Products: H100, Blackwell, and InfiniBand. Nvidia’s most important AI product has been the H100 — a GPU used to train large language models. Nvidia plans to ship a successor — Blackwell — which Huang predicted would generate “a lot of revenue” for Nvidia this year, according to the company’s Q1 FY 2025 investment conference call. Nvidia also reported a more than tripling in revenue to $3.2 billion from the company’s InfiniBand networking parts, which companies value more highly as they build “clusters of tens of thousands of chips that need to be connected.”

Under Huang’s leadership, Nvidia’s share of the AI chip industry has reached somewhere between 80% and 95%.

Signs of Nvidia’s market power include:
- High willingness to pay. Customers are willing to pay a significant premium and to wait for more than a year to obtain Nvidia’s chips.
- Time savings offset the high price. Nvidia chips are expensive; however, Nvidia says they enable companies to save time training LLMs — which more than offsets the price premium.
- Developers build on Nvidia first. Rivals who copy Nvidia hardware are always racing to catch up. The 2006 launch and ongoing improvement of CUDA — the company’s software for programming GPUs — is the most important reason designers choose Nvidia.