Prediction: Nvidia Will Be the World's Largest Company After May 28

The article anticipates Nvidia potentially surpassing Microsoft as the world's largest company following its Q1 fiscal-year 2026 earnings report on May 28, driven by continued strong demand for its GPUs in the AI data center market, where it holds over 90% market share. Despite a $5.5 billion write-off related to export controls, analysts project substantial revenue growth for Nvidia, and a beat on Q2 guidance could trigger a significant stock increase. While currently trading at 31 times forward earnings, the author suggests the stock remains attractively priced given the company's growth prospects and the projected increase in data center capital expenditures.

Analysis

Nvidia (NASDAQ: NVDA) is poised for a potentially significant market capitalization surge, with the author anticipating it could surpass Microsoft as the world's largest company following its first-quarter fiscal-year 2026 earnings report on May 28. This optimism is primarily fueled by Nvidia's commanding >90% market share in the data center GPU space, a segment critical to the ongoing AI arms race. The company's data center division generated $115 billion in revenue over the past 12 months, representing approximately 30% of the estimated $400 billion data center capital expenditure in 2024. Projections indicate this market could expand to $1 trillion by 2028, suggesting substantial runway for Nvidia's growth, even if its revenue doesn't scale proportionally. This outlook is supported by AI hyperscalers' Q1 reports, which guided for record capital expenditures despite economic headwinds. Although Nvidia's stock trades at 31 times forward earnings, the author views this as reasonable given its growth trajectory. Wall Street analysts project 66% revenue growth for Q1, slightly above management's 65% guidance, but the author speculates it could exceed 70%, consistent with Nvidia's history of beating expectations. A $5.5 billion write-off due to China export controls is expected to impact Q1 earnings growth, but the market is anticipated to focus on forward guidance. If Nvidia provides Q2 guidance significantly above the 54% growth projected by analysts, a positive stock reaction is expected.

Key Decisions for Investors

• Investors should closely monitor Nvidia's Q1 fiscal-year 2026 earnings on May 28, focusing on reported revenue growth against the 65-66% consensus and, critically, Q2 guidance, as a beat on the latter above the 54% analyst projection could be a strong positive catalyst.
• Evaluate Nvidia's current valuation of 31 times forward earnings in the context of its dominant market position and the substantial projected growth in AI data center spending, which is expected to reach $1 trillion by 2028.
• Consider the potential for strong forward guidance to overshadow the impact of the $5.5 billion write-off related to China export controls, as the market will likely prioritize future growth prospects in assessing the stock's trajectory.
• Note the author's bullish stance suggesting the current period may represent an opportune entry point for investors anticipating continued outperformance driven by AI demand, while also acknowledging the stock is not at 'bargain valuation levels'.