Jensen Huang's staggering $4 trillion bet shifts Nvidia

The warehouses of computer servers powering artificial intelligence are growing so fast that their electricity appetite is beginning to reshape household budgets.

The CEO of the company supplying most of the hardware in those facilities just laid out a projection that makes the current spending look modest by comparison.

Jensen Huang , who cofounded Nvidia ( NVDA ) and still runs the company, has told investors across multiple recent earnings calls that he expects global annual data-center capital expenditure to reach $3 trillion to $4 trillion by the end of the decade, CNBC reported.

On Nvidia's first-quarter FY27 earnings call on May 20, Chief Financial Officer Colette Kress said the company expects to reach that target by the end of this decade.

The gap between Huang's projection and what most of Wall Street expects is striking and reveals the extent of disagreement about the trajectory of artificial intelligence spending over the next several years.

Needham analyst Laura Martin noted in a recent research report cited by CNBC that industry participants expect hyperscale cloud providers to reach about $1.03 trillion in annual capital expenditure by 2028, making Huang's figure roughly four times the prevailing consensus.

Martin described Huang's forecast as different from the scenarios outlined by the cloud providers themselves and more ambitious in scope.

Bank of America analyst Vivek Arya now projects the total addressable market for AI data-center systems will reach approximately $1.7 trillion by 2030, according to Investing.com , up from a prior estimate of $1.4 trillion. The 21% revision reflects how quickly spending assumptions are shifting.

Huang speaks from the industry's center, where he has a front-row view of its trajectory.

Nvidia posted $81.6 billion in revenue during its most recent quarter, an 85% increase from the same period a year earlier, according to the company's first-quarter fiscal 2027 results . Data-center revenue alone surged 92% year over year to $75.2 billion .

Nvidia's market capitalization currently sits near $4.9 trillion, trading neck-and-neck with Apple, as CNBC reported . Apple briefly overtook Nvidia in intraday trading on July 17 for the first time in more than a year before Nvidia reclaimed the lead by the close, according to Bloomberg data .

Morgan Stanley analyst Joseph Moore wrote in a March research note cited by TipRanks that Nvidia's stock has stalled despite improving fundamentals , weighed down by doubts about its longevity.

For the last two quarters, NVIDIA has not moved while business has continued to strengthen — a function of concerns about the durability of current growth.

If Huang's spending forecast proves accurate and Nvidia maintains even a reduced share of that market, the math for a $20 trillion valuation becomes straightforward, since the company would only need to roughly quadruple from its current level.

Joseph Moore noted that Nvidia accounts for approximately 85% of AI processor revenue, with AMD at less than 5% and custom-designed chips from hyperscalers at just above 10%, noted Investing.com .

Hyperscalers are signing three-year supply contracts, some with full upfront prepayments, which Moore described as a durability signal that is hard to square with the idea that spending will slow down soon.

NVIDIA guided to $91 billion in second-quarter FY27 revenue, roughly 95% higher than the year-ago quarter, with the outlook assuming no data center compute revenue from China due to ongoing export restrictions.