Where will Nvidia, the leader in artificial intelligence (AI), be in five years?

Chip and data center specialist Nvidia (NASDAQ: NVDA) has emerged as the king of artificial intelligence (AI). Quarter after quarter, the company continues to defy expectations, setting sales and profit records and providing investors with a wealth of news so good that it's difficult to keep track.

If you've held Nvidia stock at any time in the last two years, congratulations. You probably made a lot of money.

But as I often express in my posts, investors need to think long-term. Can Nvidia's rocket ship continue to rise?

Below I will outline catalysts And Risk factors for Nvidia. Additionally, I'll detail how I think these points can impact the stock and assess how Nvidia stock might hold up over the next five years.

The next few years look great, but…

One of Nvidia's currently best-selling products is the graphics processing unit (GPU) H100. Metaplatforms CEO Mark Zuckerberg and Tesla CEO Elon Musk has both explicitly pointed out the importance of H100 technology for the generative AI development of their respective companies.

But despite the unbroken demand for the H100, Nvidia is already close to a successor chipset. The company's new Blackwell GPUs are expected to hit the market later this year, and both Wall Street and Nvidia management are predicting billions of dollars in additional sales by year's end.

In addition, companies such as Meta, Tesla, Microsoft, AmazonAnd alphabet should give Nvidia's computing and networking business a good tailwind.

With this in mind, Nvidia stock could see further gains over the next few years once Blackwell really gains momentum.

The longer-term picture is murky

An important detail to highlight about the increased capital spending by big tech companies is that not all of it is going toward Nvidia's products. Rather, each of the “Magnificent Seven” members highlighted above is working on their own custom chip designs. In other words, Nvidia's own customers want to compete with the company and move away from an over-reliance on the company's IT infrastructure.

Such dynamics will likely create headwinds for Nvidia in terms of its pricing power. I expect lower prices for Nvidia's GPUs to reduce revenue growth and gross margins. As revenue growth begins to normalize and margins begin to shrink, Nvidia's profitability profile will tighten.

The story continues

As a result, increasing competition could be the trigger that ultimately leads to a plateau across Nvidia's business. For these reasons, I believe the stock has a good chance of selling off in the long term.

The end result

Let me make one thing very clear: Nvidia stock likely has a solid future ahead of it. However, as I've said before, I think timing will become a more important factor in deciding whether or not to buy or sell Nvidia stock.

In other words, I don't think Nvidia stock will gain another 2,800% in the next five years. Although the stock will rise at times, it is highly unlikely that the stock will rise in a straight line and will experience minimal sell-offs.

Frankly, I think this dynamic has been the focus of several high-profile Nvidia billionaires' sales activity recently.

Will Blackwell and all other Nvidia releases be successful products in the next five years? Probably. But will they be so successful that Nvidia remains the king of the AI ​​world and the rest of the tech world is lucky enough to get their hands on the company's products? In my opinion, I don't think that will be the case.

For these reasons, I expect Nvidia's valuation to normalize over the next five years and the stock could well underperform its peers and the technology sector as a whole. I think there are more attractive opportunities in the chip industry and AI in general. I would think long and hard before doubling down on a position in Nvidia in the next few years.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adam Spatacco holds positions at Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia and Tesla. The Motley Fool recommends the following options: long $395 January 2026 calls on Microsoft and short $405 January 2026 calls on Microsoft. The Motley Fool has one Disclosure Policy.

Where will Nvidia, the leader in artificial intelligence (AI), be in five years? was originally published by The Motley Fool