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Rising infrastructure investments from AI hyperscalers should fuel further growth for Nvidia's data center business.
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Over the next year, Nvidia will be increasing the commercialization of its next-generation GPU architectures.
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Emerging applications and the release of new GPUs should help Nvidia maintain its dominant position in the AI infrastructure landscape.
Beth Kindig, CEO of the technology research firm I/O Fund, has built a reputation for bold calls in the tech sector. Much like Cathie Wood's long-standing conviction in Tesla, Kindig has consistently expressed unwavering enthusiasm for semiconductor giant Nvidia (NASDAQ: NVDA).
In a recent interview with Bloomberg, Kindig sparked debate after revealing her forecast that Nvidia could reach a $6 trillion market cap by the end of next calendar year -- implying roughly 43% upside from its current levels.
Below, I'll outline the logic behind Kindig's projection and then examine the key drivers that, in my view, lend credibility to her thesis.
The vast majority of Nvidia's revenue is driven by its data center segment. In the second fiscal quarter (ended July 27), Nvidia reported $41.1 billion in data center sales -- a 56% increase year over year. This translates to an annualized run rate of roughly $160 billion.
Kindig argues that the probability of Nvidia reaching $50 billion in quarterly data center revenue by year end -- or a $200 billion annual run rate -- is "very high," given the company is still in the early stages of scaling its next-generation Blackwell and Blackwell Ultra GPU architectures.
She further contends that Wall Street is underestimating capital expenditure (capex) trends across AI hyperscalers. In her estimation, analysts are not fully modeling the scale of demand for Nvidia's GPUs.
Kindig's math suggests that surging investment in infrastructure could push Nvidia's data center operation to $75 billion in quarterly sales ($300 billion annual run rate) by the end of next year -- implying 50% growth compared to her 2025 year-end figures.
Of course, understanding the arithmetic is just one piece of the story. The larger question is why I share Kindig's bullish stance -- and what's truly at stake for Nvidia as AI infrastructure spending accelerates.
At the core of Kindig's thesis is hyperscaler capex spending. The world's largest cloud providers -- Amazon, Microsoft, and Alphabet -- are committing unprecedented sums to expand compute power, setting the stage for the next phase of the AI era.