Nvidia(NASDAQ:NVDA) is up an impressive 29% over the past year. Despite concerns that the company is too immense to provide further growth potential, there are several reasons to believe that Nvidia stock can continue to deliver decent returns for investors.

If someone deposited PLN 5,000 today pounds, that’s how much it will be worth at the end of the year.

There is still potential for growth

The biggest reason for my optimism is demand. The world’s largest technology companies continue to invest heavily in AI infrastructure, and Nvidia remains the clear market leader in this space.

It seems like a novel AI spending deal is being announced almost every week, most recently focusing on data center spending. Much of this investment ultimately translates into demand for Nvidia chips.

So, as long as hyperscalers continue to raise their AI capabilities throughout the year, Nvidia appears to be well-positioned to capture a significant portion of this spend.

These expenses then translate into revenues and profits. The first quarter earnings report showed that data center revenues were driving this growth, increasing 92% from the same period last year to $75.2 billion.

This helped Nvidia’s overall business achieve record revenues of $81.6 billion, up 85% year-over-year. So it’s clear that even though the company is immense, its growth rate is still high.

Translating growth into stock forecasts

Nvidia’s current price-to-earnings ratio (P/E) is 37.21. For Nasdaqthe index’s average P/E is 31.89. Therefore, the argument that Nvidia cannot appreciate because it is overpriced is not persuasive. Sure, it’s not super economical. But we’re not talking about a company with a crazy P/E ratio of 100.

At the current price of $210, I think the stock will be able to return to year-to-date highs of around $225 before the end of the year and potentially rise to $250 if the current financial updates show growth similar to what was indicated in the first quarter results.

Moreover, if the overall sentiment around AI remains positive, it could also support the company’s stock.

Threats to the view

In my opinion, the main risk is competition. For example, Advanced micro devices continues to refine its AI offerings as other companies develop their own custom chips.

This may reduce reliance on Nvidia for certain workloads. At the same time, export restrictions affecting sales to China remain an ongoing uncertainty that may impact revenue growth.

Even considering these concerns, I believe $225-$250 is a reasonable range for the company’s stock to trade at year-end. If that were the case, it could turn into 5,000. pounds in as much as 5,950 pounds.

Of course, this is not guaranteed, because in December 5 thousand. pounds may be worth less. But it certainly shows what can be possible and that it’s worth considering.

Is it worth investing £5,000 in Nvidia now?

If investing expert Mark Rogers and his team have stock advice, it can pay to listen. After all, Twelfth Magpie’s flagship Share Advisor newsletter, which it has run for almost a decade, provides thousands of paying members with the best share recommendations from across the UK and US markets.

Mark believes there are 6 standout stocks that investors should consider buying right now. Want to see if Nvidia made the list?

Jon Smith does not hold any position in the companies mentioned