1 Trillion Reasons to Buy Nvidia's Stock Right Now

Geoffrey Seiler, The Motley Fool

Sat, Mar 22, 2025, 11:00 AM 5 min read

At its GTC conference, Nvidia (NASDAQ: NVDA) gave investors 1 trillion potential reasons to buy its stock. That came in the form of CEO Jensen Huang projecting that data center infrastructure capital expenditure (capex) would hit $1 trillion or more by 2028.

Investors, nonetheless, largely shrugged off the robust forecast and other upbeat news from the event. That said, if Nvidia's projections come to fruition, the stock has a lot more upside from here.

$1 trillion in data center infrastructure capex by 2028 would be a continued acceleration of spending in the space, which would be great news for Nvidia. The company's graphics processing units (GPUs) have become the backbone of the artificial intelligence (AI) infrastructure buildout, due to their powerful data processing abilities and ease of use.

In a chart from the presentation, Nvidia estimated 2024 data center infrastructure spending to be around $400 billion in 2024. For its past fiscal year (fiscal year 2025 ended in January), the company produced total revenue of $130.5 billion, of which $115.2 billion was from its data center segment. Meanwhile, research company Dell'Oro Group just estimated that 2024 data center infrastructure spending reached $455 billion. That translates into Nvidia currently capturing around 25% to 30% of this spending.

If Nvidia was able to keep its current share of this spending, that would translate into between $250 billion to $300 billion in data center infrastructure revenue alone in 2028. The company plans to continue to lead the way with both its chips and its software. It introduced the new Blackwell Ultra GPU at the event, which will begin shipping in the second half of this year. The new Blackwell chips are more powerful, making them great for more time-sensitive services. Nvidia predicted Blackwell revenue would be much greater than the revenue it generated from its earlier Hopper architecture.

Continuing with its chip innovation, the company is also set to introduce its new Vera Rubin chip, which will combine a GPU with its next-generation Rubin architecture and a custom-designed central processing unit (CPU), using Arm's technology. It said the CPU will be twice as fast as the off-the-shelf one used in its earlier Grace Blackwell chips. Meanwhile, it will look to increase the number of GPU dies in its current Blackwell chips from two to four with the "Rubin Next" chip that it plans to launch in the second half of 2027.

Nvidia isn't just innovating on the hardware side. It also revealed a new open-source software system called Nvidia Dynamo that will help increase inference throughput and reduce costs. The company said the new software will help orchestrate and accelerate inference communication across thousands of GPUs. It said that Dynamo is not just an operating system for a data center, but for an entire AI factory.