Nvidia Predicts $1 Trillion Data Center Spending by 2028

During its GTC conference, Nvidia (NASDAQ: NVDA) presented investors with a notable forecast: data center infrastructure capital expenditure (capex) is expected to exceed $1 trillion by 2028. CEO Jensen Huang’s projections provided a compelling reason for investors to consider buying the company’s stock.

Despite the strong outlook, investors reacted with caution, largely overlooking the optimistic news shared at the event. However, should Nvidia’s expectations materialize, the potential for stock appreciation remains significant.

A Strong Growth Forecast for Data Centers

The anticipated $1 trillion investment in data center infrastructure by 2028 signifies an accelerating trend in spending, which bodes well for Nvidia. The company’s graphics processing units (GPUs) are becoming essential in building AI infrastructure, recognized for their high data processing capabilities.

Nvidia projected $400 billion in data center infrastructure spending for 2024. In its last fiscal year (2025, ending January), the company generated total revenue of $130.5 billion, with $115.2 billion attributed to its data center segment. Notably, Dell’Oro Group anticipates 2024 spending on data center infrastructure will reach $455 billion, indicating that Nvidia is currently capturing about 25% to 30% of this market.

If Nvidia maintains its market share, it could see its data center revenue skyrocket to between $250 billion and $300 billion by 2028. The company intends to stay at the forefront of this growth by continuing to innovate, recently unveiling the Blackwell Ultra GPU, which will ship in the latter half of this year. This advanced chip promises enhanced capabilities for more time-sensitive applications, with Nvidia predicting that Blackwell revenues will surpass those of its previous Hopper architecture.

In addition, Nvidia is set to introduce its Vera Rubin chip, which fuses a GPU with next-generation Rubin architecture and a custom-designed central processing unit (CPU) built on Arm‘s technology. Nvidia claims that the new CPU will be twice as fast as the standard variant used in earlier Grace Blackwell chips. Furthermore, the upcoming “Rubin Next” chip is expected to increase the number of GPU dies from two to four, launching in the second half of 2027.

Innovation Beyond Hardware

Nvidia’s advancements aren’t limited to hardware. The company also announced Nvidia Dynamo, a new open-source software system designed to enhance inference throughput and minimize costs. This software aims to synchronize and expedite inference communication among thousands of GPUs, positioning Nvidia Dynamo as an operating system that supports both data centers and full-scale AI operations.

Nvidia’s ambitions extend beyond data centers into robotics and autonomous driving markets. Huang stated that “the age of generalist robotics is here,” introducing Isaac GROOT N1, described as the world’s first “open Humanoid Robot foundation model.” This model will allow humanoid robots to learn tasks through real or synthetic data, aimed at addressing a global shortage of 50 million workers.

Additionally, Nvidia has partnered with General Motors to develop an autonomous driving system, which is notable considering GM previously halted its robotaxi initiative after encountering challenges. Nvidia plans to supply GPUs and assist GM in creating tailored AI solutions, also leveraging its chips for advanced manufacturing models in next-generation robotics. This follows a recent agreement with Toyota to provide chips and software for enhancing driver-assistance technologies.

Image source: Getty Images.

Should Investors Consider Nvidia Stock?

As Nvidia leads the charge in AI infrastructure, it is not resting on its achievements. With ongoing increases in AI infrastructure spending and continued innovation, Nvidia aims to solidify its position in AI inference alongside its established dominance in AI training. The company is also exploring growth opportunities beyond data centers.

Currently, Nvidia’s Stock appears attractively valued following a recent market correction. It trades with a forward price-to-earnings (P/E) ratio of under 26 times analysts’ estimates for this year and has a price/earnings-to-growth (PEG) ratio below 0.5. Since a PEG of 1 typically indicates a stock is undervalued, Nvidia’s valuation presents an enticing long-term buying opportunity.

Explore an Exciting Investment Opportunity

Feeling as though you’ve missed out on some of the most successful stocks? There may be another chance at Nvidia.

Our team of analysts periodically issues a “Double Down” Stock recommendation for companies poised for growth. If you’re concerned about missing your opportunity, now could be the perfect moment to invest before it’s too late. Here are some impressive returns:

• Nvidia: If you had invested $1,000 when we doubled down in 2009, you’d have $305,226!*
• Apple: If you had invested $1,000 when we doubled down in 2008, you’d have $41,382!*
• Netflix: If you had invested $1,000 when we doubled down in 2004, you’d have $517,876!*

We are currently issuing “Double Down” alerts for three remarkable companies. This opportunity may be rare.

Continue »

*Stock Advisor returns as of March 18, 2025

Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.