Nvidia shares rose yesterday on the back of the company’s Chief Financial Officer Colette Kress telling investors that Nvidia could see huge revenue growth by 2028.
Nvidia’s long-term prospects for growth have also been brought to light by the fact that companies, cloud providers and technology companies are spending a lot of money on artificial intelligence technology and building out its infrastructure.
Nvidia has become one of the biggest beneficiaries of the global AI boom with graphics processing units (GPUs) that are increasingly used to train and run increasingly sophisticated AI models. The company's data-centre business has grown very quickly as tech giants invest billions of dollars in computing capacity for generative AI and as well as other advanced AI applications.
Kress’s comments on the possibility of revenue increasing by around 70% in 2028 have therefore attracted huge interest from investors. The outlook supports the view that high-performance computing demand will still be strong even as the AI industry moves out of this initial investment cycle.
Nvidia's position in AI computing has created a unique growth pattern for the semiconductor industry in a sector that is highly cyclical; however, Nvidia is very cyclical but Nvidia's position in the AI computing industry is so different from its competitors. It is one that has a very high growth profile in AI computing, and GPUs are widely used in large data centres where they are used to power machine-learning intensive operations. Nvidia also has created a broader ecosystem around its hardware through software, networking technology and specialised computing platforms.
The company's growth has been closely linked to the spending plans of big cloud-service providers and technology companies. These are building large data centres for AI applications, so accelerators and related infrastructure are in high demand.
A 70% revenue increase by 2028 would represent a major expansion, but investors should distinguish between management suggestion of potential growth and a guaranteed financial forecast. In future, revenue will depend on AI adoption, capital spending by customers, competition, supply-chain conditions and broader economic trends.
Nvidia is also facing more competition in the AI-chip market. Other semiconductor companies are building their own accelerators and even some of the world's largest tech companies are designing their own AI chips for internal use. Nvidia will have to maintain its technological advantage and software ecosystem to be able to contend with these challenges in the future.
Nvidia has developed a strong position in the AI infrastructure market in spite of all these challenges. CUDA software and developer relationships and its vast number of data-centre products have created a network of technologies that go beyond the GPU itself. It can be challenging to move to a different platform quickly - this ecosystem is also more difficult for customers to get into.
The company's financial performance is thus an important indicator of the general AI economy. Investors look at Nvidia's revenue growth, data-centre sales, gross margins and forward guidance to check whether spending on artificial intelligence is sustainable.
The latest comments also come as the AI infrastructure market enters a new phase. Early AI investment focused heavily on building computing capacity for large language models and generative AI systems. More and more companies are looking at how those systems can be integrated into products, enterprise software and automated workflows.
If AI applications continue to grow across industries, demand for computing infrastructure could remain elevated for years. That will help Nvidia to grow long-term even if individual customers adjust their capital expenditure from quarter to quarter.
At the same time, Nvidia shares are at a very high valuation and investors will be closely watching future growth expectations. A company can deliver good financial results and still have a stock that is volatile when the market thinks future growth is priced into the shares. Hence, expectations of revenue in 2028 may be a much more important part of the investment conversation.
Nvidia has also grown significantly in the semiconductor industry in the last few years. Nvidia was most famous for GPUs used in gaming and graphics, but AI has changed that. The main driver of growth has been data centres, with Nvidia supplying processors, networking equipment and complete computing platforms for AI workloads.
The company’s relationship with the largest cloud providers is also important to the growth story. Cloud companies are dependent on large amounts of computing power to provide AI services to businesses and consumers. Nvidia's hardware has become a key component of many of those infrastructure investments.
The company needs to continue innovating as AI workloads become more complex. Faster chips, better energy efficiency, advanced networking and software optimisation will all play a role in improving the economics of large-scale AI data centres.
For investors, the new revenue growth comments are just one more reason to monitor Nvidia's upcoming financial results and management guidance. And the fundamental issue is whether actual demand continues to support the very high growth expectations on the company.
Nvidia shares are up after Kress’s comments, showing investors felt the long-term outlook was good. But stock market direction, as per general technology sector sentiment, interest rates, and corporate spending expectations all have their influence.
Nvidia’s CFO also said the company sees a lot of room for growth as artificial intelligence continues to change the technology landscape. A potential 70% revenue growth scenario by 2028 shows the scale of opportunity Nvidia believes exists in AI infrastructure.
Whether the company gets to that level will depend on how rapidly AI adoption takes place and how well Nvidia is able to remain competitive. For now, the combination of strong AI demand, growing data-centre investment and Nvidia’s well-established tech ecosystem makes the company one of the most closely watched names in semiconductor and technology markets in the world.
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