Key Points
Nvidia CEO Jensen Huang revealed a staggering $500 billion demand for its Blackwell and Rubin chips through 2026.
Surging demand is expected to significantly boost Nvidia's revenue, providing investors with a compelling reason to buy the stock.
The stock's forward price-to-earnings multiple leaves room for more upside.
Nvidia (NASDAQ: NVDA) CEO Jensen Huang dropped a bombshell comment during his keynote address at the company's Global Technology Conference (GTC) 2025 in October. Shares are surging to new highs after Huang revealed there is half a trillion dollars' worth of demand for the company's chips through 2026.
Nvidia's leadership in the artificial intelligence (AI) chip market, specifically its graphics processing units (GPUs), has driven impressive growth, with revenue up 56% year over year in fiscal Q2. It is providing the most powerful chips that are essential for teaching computers to think like humans.
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At GTC 2025, Huang put a big number on the forward-looking demand for its chips that suggests the stock is still underpriced at around $200.
Demand for Nvidia chips is stronger than ever
During the conference, Huang said, "I think we're probably the first technology company in history to have visibility into half a trillion dollars of cumulative Blackwell and early ramps of Rubin through 2026."
Huang said the $500 billion worth of Blackwell and Rubin chips is for the next five quarters. "This is how much is on the books," Huang added. Blackwell is Nvidia's current-generation GPU, while Rubin is expected to launch next year as the next-generation chip design.
For perspective, Nvidia's trailing-12-month revenue is $165 billion through the fiscal second quarter. The current consensus estimate has Nvidia's revenue reaching $278 billion next year. Analysts will likely revise those estimates higher, which is why the stock is up about 10% since Huang made that comment.
The opportunity in AI is clearly not slowing down but is still strengthening, maybe even accelerating. What makes it so compelling is that the most profitable companies -- the "Magnificent Seven" and other tech leaders -- are the ones funding it, which gives it sustainability. This is starting to look like an unprecedented growth opportunity. Nvidia surprised investors in September when the company revealed that data center spending could reach $4 trillion by the end of the decade.
The stock still offers value
With the impressive visibility in demand over the next year, Huang also provided reassurance to investors who have concerns about the increasing competition from custom AI chip designers. Those chips are not able to handle the massive workload for accelerated computing like Nvidia's general-purpose GPUs. These specialized AI chips are used to run certain tasks in cloud service providers' offerings where an Nvidia GPU would be overkill.
Nvidia made some notable announcements with leading tech companies to power AI services across the economy. It is investing $1 billion in Nokia to build AI-powered telecommunications for 5G-advanced and 6G networks. It is also working with Oracle to build an AI supercomputer for the Department of Energy.
Despite the tremendous demand for Nvidia's chips, the stock is still trading at a reasonable forward (one-year) price-to-earnings multiple of 33. This is for a business that is growing earnings at nearly twice that rate, not to mention that analysts' earnings estimates are likely too low following Huang's remarks on demand visibility. The stock still offers attractive return prospects at these highs.
John Ballard has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia and Oracle. The Motley Fool has a disclosure policy.