(Vlastelica/Bloomberg) After being the first chipmaker to surpass a $1 trillion market capitalization two years ago, Nvidia Corp. is poised to reach an even more impressive milestone: becoming the first firm to exceed $4 trillion.
Nvidia shares have recovered to a record level after the launch of China’s DeepSeek caused the price to plummet earlier this year and fueled worries that investments in AI infrastructure would stagnate.
Its largest clients continue to spend heavily, with a large portion going toward its computer systems. Its market valuation has increased by 64% from its April low to $3.78 trillion, surpassing Microsoft Corp. at $3.70 trillion to reclaim its position as the most valuable business in the world.
Bulls are predicting that Nvidia’s stock has a lot of opportunity to grow because of the growing number of customers demanding the company’s newest AI accelerators and the fact that rivals are still far away.
Related Articles
-
Apple, Google told DeepSeek app is illegal in Germany
-
Windows infamous blue screen of death will soon turn black
-
Apple property shopping spree tops half-billion dollars in South Bay this week
-
Trump Mobile still claims its phone is Made in the USA. But it pulled that language from its site
-
Consumer tip: How to spot a scam text before it s too late
According to Aziz Hamzaogullari, chief investment officer of Loomis, Sayles & Co. and the creator of the company’s growth equity strategies division, Nvidia is genuinely in a unique position and will remain so for the next ten or more years.
It’s not Hamzaogullari alone. Ananda Baruah, an analyst at Loop Capital, increased Nvidia’s price objective this week from $175 to $250, which would represent a market value of around $6 trillion. By 2028, Baruah, who has a buy rating on the company, anticipates that yearly AI spending from all kinds of clients would have increased to around $2 trillion.
We remind people that Nvidia is still virtually a monopoly for crucial tech and that it has pricing (and margin) power, even though it may seem amazing that its fundamentals can continue to rise from their current levels. On June 25, Baruah mentioned Nvidia by its ticker symbol in a research note.
The optimism around Nvidia and other AI equipment manufacturers is a sharp contrast to earlier in the year, when concerns that Nvidia’s clients might reduce their expenditure were aroused by the introduction of sophisticated chatbots like DeepSeek, which were made comparatively cheaply in China. Rather, American tech behemoths are investing much more in computing infrastructure.
According to the average of analyst projections published by Bloomberg, Microsoft, Meta, Amazon.com Inc., and Alphabet Inc. are expected to invest approximately $350 billion in capital expenditures in their next fiscal years, up from $310 billion in the current year. These businesses generate over 40% of Nvidia’s total revenue.
Naturally, there are still several threats that could endanger Nvidia’s comeback. Because it depends on Taiwan Semiconductor Manufacturing Co. to produce its chips, Nvidia is subject to the erratic trade policies of US President Donald Trump. On July 9, Trump’s 90-day moratorium on the highest tariffs would come to an end.
However, there is no assurance that Nvidia’s largest clients won’t alter their buying patterns in the upcoming years. To get around Nvidia’s exorbitant prices, many of them are creating their own processors.
“We already know that Nvidia’s largest customers are trying to figure out ways to be more efficient with their spending, not just with Nvidia but also offloading to their own silicon,” Dan Davidowitz, chief investment officer at Polen Capital Management, stated. “The valuation depends on the persistence of growth.” To feel comfortable with the valuation, you need to have really strong assumptions, and we simply don’t have a clear enough picture of what that demand looks like.
Compared to the S&P 500, which is valued at 22 times profits over the next 12 months, Nvidia’s shares are valued at 32 times.
Loomis Sayles’s Hamzaogullari is unconcerned about the stock’s price because he still believes AI will revolutionize society and that Nvidia will continue to be a major beneficiary as the technology’s productivity gains increase.
Nvidia continues to be one of the largest benefactors of this secular structural shift, but that doesn’t mean things will be stable Eddie of the time or that spending will not be disrupted, according to Hamzaogullari. Against that environment, the stock continues to appear good.
Leading Technology News
- Masayoshi Son acknowledged the outlines of a succession plan, addressing what may be the single biggest concern among investors, and name-checked the head of SoftBank Group Corp. s telecom unit Junichi Miyakawa.
- House Republicans aim to get the Senate s landmark stablecoin legislation known as the Genius Act to President Donald Trump s desk for signature as soon as the week of July 7, according to people with direct knowledge of the strategy.
- Apple and Google s Android have been warned by a top German privacy regulator that the Chinese AI service DeepSeek, available on their app stores, constitutes illegal content because it exposes users data to Chinese authorities.
- The US will need more nuclear power as it enters into greater competition with China, said Mike Gallagher, head of defense at Palantir Technologies Inc.
- Alibaba Group Holding Ltd. elevated e-commerce head Jiang Fan while trimming the members of a longstanding leadership body, as the Chinese tech giant pivots toward AI and overseas expansion.
Earnings are due on Friday.
- No major earnings expected
In collaboration with Phil Serafino.
You can read more articles like this one on Bloomberg.com.
Bloomberg L.P., 2025.
