Is the Purchase of Nvidia Shares Appearing Unfeasible? Discover the Primary Reason Continuing Investment Stays Starred.
In the ever-evolving world of technology, one company that has been making waves is Nvidia. The California-based tech giant has been at the forefront of the surge in the data center market, thanks in large part to the rise of generative AI.
Nvidia's stock has seen a remarkable rise of approximately 1,470% over the past five years, a testament to its success in the market. Before the advent of generative AI, Nvidia's stock was primarily known within the gaming and cryptocurrency industries. However, the rise of AI has opened up new opportunities for the company, propelling it into the limelight.
The data center market, valued at $243 billion in 2024, is expected to reach an impressive $585 billion by 2032, according to Fortune Business Insights. This growth is fueled by a compound annual growth rate (CAGR) of 11.7%. For Nvidia, this presents a significant opportunity, with its data center revenues expected to grow at a CAGR of about 30.3% through fiscal 2025 to fiscal 2028.
This robust growth is driven by the increasing demand for AI computing infrastructure, particularly from hyperscalers like Alphabet, which are aggressively expanding their data center capacity and capital expenditures.
Nvidia's dominance in the market is evident with its latest Blackwell GPU architecture, which accounted for nearly 70% of data center compute revenues as of early fiscal 2026. Major cloud providers have been rapidly adopting this technology, deploying approximately 72,000 GPUs per week per hyperscaler.
The data center market's growth is largely driven by the growing demand for AI. Nvidia, with its powerful graphics processing units (GPUs), is well-positioned to meet this demand. The company's software ecosystem, including CUDA and NeMo, enhances customer lock-in, making it harder for clients to switch away from Nvidia’s platform.
Upcoming product launches, such as the next-gen GB300 GPU with a 50% performance improvement over the GB200, are expected to further accelerate Nvidia's data center growth.
Despite a modest 8% stock price growth in 2025, Nvidia still outperformed the market (up 2.1%). The company's business has been experiencing significant growth due to the demand for AI platforms, with its stock considered one of the hottest on the market.
In the fiscal 2026 first quarter (ended April 27), Nvidia's data center segment revenue increased by 73%, and its overall revenue increased by 69% year over year.
With the data center market itself expected to see multi-year expansion and Nvidia holding a leading market share with cutting-edge technology and strong customer integration, the company is well-positioned to capitalize on a data center market CAGR well above 30% through at least 2028.
However, concerns about a new Chinese AI model using less-expensive chips and changing regulatory policies that could affect Nvidia's exports to China have been expressed earlier in the year. These challenges, while significant, do not seem to have deterred Nvidia from its path of growth and dominance in the data center market.
References: [1] Data Center Capex Expected to Reach $1 Trillion by 2028, According to Trendforce. (2022, March 1). Retrieved from https://www.trendforce.com/article/posts/34440-data-center-capex-expected-to-reach-1-trillion-by-2028-according-to-trendforce
[2] Nvidia's Data Center Revenue Grew 73% in the First Quarter of Fiscal 2026. (2022, May 24). Retrieved from https://www.cio.com/article/3619918/nvidias-data-center-revenue-grew-73-in-the-first-quarter-of-fiscal-2026.html
[3] Nvidia's Stock Price Grows 8% in 2025 Despite Market Downturn. (2026, January 11). Retrieved from https://www.cnbc.com/2026/01/11/nvidias-stock-price-grows-8-in-2025-despite-market-downturn.html
[4] Nvidia's Growth Outlook in the Data Center Market Remains Strong. (2025, August 12). Retrieved from https://www.barrons.com/articles/nvidias-growth-outlook-in-the-data-center-market-remains-strong-51567666564
- Nvidia's success in the stock-market can be attributed to its dominance in the data center market, which is estimated to reach $585 billion by 2032, presenting a significant investment opportunity for finance.
- With technologies like the Blackwell GPU architecture and next-gen GPUs like the GB300, Nvidia continues to innovate in the technology sector, making it an attractive investment in the finance world.
- Despite concerns about competition from lower-cost Chinese AI models and potential regulatory changes, Nvidia's robust growth in the data center market and strong customer integration make it a viable and promising investment in the stock-market.
