NVDA is the top buy recommendation; current valuation is cheap with >54% upside potential.

Nvidia CEO Jensen Hong said that the size of the AI market will reach 3 trillion to 4 trillion by 2030. I'm going to discuss why that's a realistic forecast and give you the details on what it could mean for Nvidia stock investors and AI stock investors more broadly.

So Jensen Huang reiterated his expectation that the size of the AI market will reach 3 to four trillion by 2030 during the talk at the Goldman Sachs Communicopia Tech Conference on Thursday.

It was exactly one year ago that he made the initial prediction at the same event. So, one year later, I'm actually surprised that Jensen Huang didn't increase that forecast because the AI market has grown more than what we expected one year ago.

And almost every three months when these companies reported quarterly financial results, they've almost all unanimously increased their estimates, including Nvidia. And so that's why I'm saying I'm surprised that Jetson Huang didn't increase this forecast to a much higher number than what he estimated just one year ago.

Okay, so Jensen Hang has been relatively accurate or underestimating the forecast that he's provided to stock market participants. So with Jensen Juan, he's been relatively accurate or a little bit underestimating and overd delivering, especially when it comes to forecasts for Nvidia's quarterly results or Nvidia's annual results.

He's been pretty much on target or the company has reported better than expected results.

And this has been the case for at least the last uh four to eight quarters.

With Nvidia CEO Jensen Hang, he's been relatively accurate. And if if there was a bias, he's been biased towards underpromising and overd delivering slightly. He went on to say the semiconductor industry is just going to keep getting larger and larger, which is what we're seeing now with these two fundamental ideas that we have a new layer of computing with a new application and the end of Moore's law.

People are expecting these AI models to be smarter and smarter because they don't like wrong answers. So, Nvidia is forecasting 70% revenue growth for its fiscal year 2028, which was above what analysts were expecting for that fiscal year.

Jensen Huang added that their revenue growth would have been much larger if it wasn't for memory chip shortages, right?

So, if there weren't these shortages in the memory market, Nvidia could have reported could have uh generated 80 to 100% revenue growth in its upcoming fiscal year.

Nvidia CEO Jensen Hong during the quarterly conference call actually said that sales could be much larger in fiscal 2028 if it wasn't for these memory chip shortages.

And for Nvidia CEO to say much larger, that means at least 80% or more, right? If it was just a few percentage points more, he would have just said it would have been larger, but he said much larger in the quarterly conference call.

And so this estimate from Nvidia CEO seems realistic. Nvidia already generated $33 billion in trailing 12-month revenue at the current spending pace.

They have a dominant share of the AI data center market. Additionally, they have ownership interests in companies like Coreeave, like Intel, like Open AAI. They own pieces of these companies.

So, Nvidia is likely to benefit from this multi-trillion dollar category in multiple ways.

And that's great news for Nvidia stock investors, which is still trading at a relatively cheap valuation of a forward price to earnings of just 14.6. So, I know a lot of investors might think Nvidia stock is expensive when you think about the market capitalization at roughly 5 trillion, but when you think about it in terms of the value you're getting in the earnings per share and the earning power of the company, it's relatively cheap.

Similarly, when you look at valuation on Nvidia using a discounted cash flow model, the one that I created and calculated for Nvidia sees the value of the business at $338 per share and today it's trading at 219.

So, it looks cheap regardless of the way I evaluate Nvidia. I see an upside of over 54%. I own Nvidia stock and I've ranked Nvidia as the best stock you can buy right now in 2026.