Phil Panaro, Founder & former CEO of Boston Consulting Group, thinks we’ll see Nvidia (NVDA) shares hit $800 by 2030, meaning it would have to more than quintuple in 5 years. The stock’s all-time high, which it hit yesterday, was at $152.89. How does that math work?

The numbers released in their latest quarter “solidified” his view. His logical chain goes like this: Nvidia hit $35 billion in revenue in a single quarter, or 3 months. In 2023, for the entire year, its revenue was $27 billion. $35-$27 = Nvidia in one quarter beat its entire last year by $8 billion in revenue, which Phil says is a historical first with the margins Nvidia has been able to keep.

His case for $800/share means that Nvidia needs to reach $600 billion in revenue per year by 2030. For context, Amazon (AMZN), whose multi-pronged business heavily relies on 3^rd -party merchants and manufacturers creating the goods it sells, made $575 billion in revenue in all of 2023, while Walmart (WMT) hit $648 billion. Even on the top side, assuming Nvidia made an average of $35 billion in every quarter of this year (bringing its total to $140 billion for 2024), that would still require over 300% revenue growth in 5 years.

Comparing our $140 estimate to last year’s $27 billion, that’s a growth rate of around 400% – huge, for sure. There’s no denying the rate of growth is incredible right now, but with the law of big numbers, it could taper off. Its quarterly revenue growth is already slowing year over year – still at a staggering nearly 100% for this latest report, but down from the strong triple digits of earlier this year.

Phil sees three drivers for Nvidia to hit his targets: the A.I. revolution, the transition from Web2 to Web3, and the DOGE department. I’m not sure about execution, though, because it seems to require everything firing on all cylinders.

A.I. penetration is less than 1%, Phil says, and already has driven Nvidia this far. The market will certainly continue to expand, but how far and how fast? Will companies continue finding use cases for A.I., which is an expensive tool, or will it hit its limits? As the dust settles over the excitement of breakthrough technology, there may be less pressure by markets for companies to jump on the bandwagon. We’ve already seen many times that there are plenty of issues with this iteration of A.I., including making up facts, being rude to users, or being unable to answer customer questions or identify images correctly (warehouse picker robots are still not competitive with humans).

Obviously, the more data, the more refining of the product, but A.I. is less of an intelligence and more of a predictive machine made of math. The machine will get better and better at guessing what word usually comes next in a sentence, but it doesn’t understand the meaning and nuance of language the way humans do. That’s why it has no compunction about lying, or sounds stilted, or struggles to follow subtlety.

This is outside of the incredible power demand A.I. has, which strains our aging energy infrastructure and is draining water supplies. There’s more coming down the pipeline – we’ve been talking nuclear energy, excitingly – but those will take years to come online.

Let’s say that even with these difficulties, A.I.’s boom continues unabashed, and look at the move from Web2 to Web3. Web2 is the Internet we all know and love/hate. Web1 was the earliest version, which many call the “Static Web”, where websites weren’t interactive. Web3, according to the Harvard Business Review, is “an extension of cryptocurrency”, and per McKinsey, is a “new, decentralized internet built on blockchains.” Phil Panaro argues that Goldman Sachs, Citibank, and Morgan Stanley all estimate that by 2030 the Web3 market will be worth $8T-$12T, while currently less than $1 trillion is spent per year.

Bitcoin futures have soared since the U.S. election, with market participants betting on a friendly atmosphere towards crypto in the White House. Ok, but over the last few years, crypto’s use case has varied. Is it a currency? Is it a store of value like gold? Is it a commodity product? And that’s just the most popular coin. Blockchain is its own beast.

Blockchain is a fascinating product: a public block of data is created that cannot be altered. No modification, no editing – per Investopedia, the “only trust is needed at the point where a user or program enters data.” Building something using a blockchain means that it’s engraved in stone for as long as the Internet lives.

That means that any code, any functionality, any information, needs to be 100% correct and working when it is launched. There’s no ability to patch in an update. Any new information, expansion, or added functionality becomes another link on the chain – and you can’t slip a new link in the middle, it can only go on the end. The unwieldiness of this should immediately become clear. In its current iterations, blockchain is also not user-friendly the way Web2 is – the same way that bitcoin is not as user-friendly as the U.S. dollar (and that’s part of the point of the whole enterprise).

But saying that the Web3 sonic-booms in the next 4 years, the last argument Phil makes is similar to point 1, just through the lens of government instead of corporate. Elon Musk’s ‘DOGE’ Department, which Trump compared to the “’Manhattan Project’ of our time”, is looking to axe millions of government jobs. Phil says that, “if they do it right, they’ll reinvent how government is managed and delivered.” There’s a big if from the beginning – even with a red trifecta, Congress has the authority DOGE wants to claim.

Phil’s vision for DOGE relies heavily on turning those cut government jobs into A.I. programs. “The federal government has over 300,000 buildings…You can take all of those buildings and build digital twins for them, and operate and maintain them off your phone using A.I.” The same, he argues, for “all government infrastructure.” While this is a rosy picture, the machinations of government are slow, and this assumes that Musk and Ramaswamy have the same vision that Panaro does, much less the authority to carry out that mandate.

Musk, meanwhile, is musing about forcing the end of federal remote work – a far cry from moving government functions onto remote devices like cell phones. Security risks are also another major consideration, as is the outdated technology much of the government still uses: can it make the leap straight to A.I.? I think there are certainly use cases for A.I. in the federal government, but it may not take off as quickly as Phil’s vision.

Overall, Nvidia could have a long runway upwards ahead of it, as long as it can keep up its manufacturing and technological development. It’s a clear leader with no nearby competitors, and demand will likely remain strong for many years. Will Nvidia hit $800 in the next 5 years? Or will it take longer, settling into a powerhouse role as the chip provider for the world.

Watch the interview below:

Tune in live from 8 a.m. to 5 p.m. ET, or anytime, anywhere, on‑demand.

Or stream it via thinkorswim® and thinkorswim Mobile, available through our broker-dealer affiliate, Charles Schwab & Co., Inc

Please do not reply to this email. Replies are not delivered to Schwab Network. For inquiries or comments, please email [email protected].

See how your information is protected with our privacy statement. 

Charles Schwab and all third parties mentioned are separate and unaffiliated, and are not responsible for one another's policies, services or opinions. Schwab Network is brought to you by Charles Schwab Media Productions Company (“CSMPC”). CSMPC is a wholly owned subsidiary of The Charles Schwab Corporation and is not a financial advisor, registered investment advisor, broker-dealer, or futures commission merchant.