Wall Street’s consensus estimate (according to Yahoo) suggests Nvidia will deliver $125.6 billion in total revenue for the whole of fiscal 2025, representing a 125% increase from fiscal 2024. The company is expected to follow that up with $179.2 billion in revenue in fiscal 2026.

The data center segment will be responsible for the majority of that growth. It accounted for 87% of Nvidia’s total revenue during the fiscal 2025 second quarter (which ended July 28), coming in at a record $26.3 billion — a whopping 154% increase from the year-ago period.

The incredible demand for Blackwell should drive more record results in the coming quarters. Microsoft is rumored to be one of the biggest buyers of the new GPUs. During its fiscal 2024 (which ended June 30), Microsoft spent a staggering $55.7 billion on capital expenditures, most of which went toward AI data center infrastructure and chips. The company has already stated that it will spend even more in fiscal 2025.

Amazon is also on track to spend over $60 billion on AI infrastructure in calendar 2024, and Meta Platforms has told investors it will spend up to $40 billion. Those numbers are likely to climb further in 2025.

Nvidia’s dominant market share in the data center GPU space has afforded it an incredible amount of pricing power, which is driving a surge in its profits. The company generated $54.9 billion in net income over the last four quarters, which translated to $2.21 in earnings per share (EPS).

Based on that EPS figure and Nvidia’s current stock price of $139.56, it trades at a price-to-earnings (P/E) ratio of 63.1. That isn’t cheap at face value — in fact, it’s almost double the 32.1 P/E ratio of the Nasdaq-100 technology index.

However, Wall Street expects Nvidia to generate $4.06 in EPS in fiscal 2026, placing its forward P/E ratio at 34.3. That might be far too cheap for two reasons.

First, Nvidia stock traded at an average P/E ratio of 58.2 for the last 10 years, and it was regularly above 50 even before the AI revolution gripped Wall Street.

Second, as fiscal 2026 progresses, analysts will start issuing their forecasts for fiscal 2027. If Nvidia appears likely to deliver incredible revenue and earnings growth yet again, investors might be willing to pay a much higher P/E ratio for its stock. In other words, 34.3 might be far too attractive to pass up.

So, if Wall Street’s EPS forecast for fiscal 2026 is accurate, and if Nvidia trades in line with its 10-year average P/E ratio, that implies that its stock could rise by 70% or more over the course of next year.

There is no other company in the trillion-dollar club that has anywhere near as much revenue or earnings growth forecasted for next year, which is why I think Nvidia is the obvious choice to outperform.

Huang believes data center operators will spend $1 trillion building AI infrastructure over the next five years, and if he’s right, Nvidia’s incredible run might have legs way beyond 2025.

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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. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Prediction: This Will Be the Best-Performing Stock in the $1 Trillion Club in 2025 was originally published by The Motley Fool