Nvidia Corporation is pushing toward an impressive milestone with its market capitalisation approaching $4 trillion. This marks a first for a chip manufacturer, and despite a few setbacks—like the temporary dip caused by China’s DeepSeek—the company has bounced back strongly, with its stock climbing 1.8% to reach a record high last Friday.
Currently, Nvidia’s market cap stands at $3.8 trillion, outpacing Microsoft’s $3.7 trillion. The surge is powered by an enduring demand for its AI accelerators, with powerhouse clients such as Microsoft, Meta, Amazon, and Alphabet continuing to invest in robust computing infrastructure. Analyst Ananda Baruah from Loop Capital has even raised his target price to $250, suggesting that the firm could potentially hit a $6 trillion valuation as AI-related spending may reach $2 trillion by 2028.
There are, however, some challenges on the horizon. Nvidia relies heavily on Taiwan Semiconductor Manufacturing Co. for chip production, and uncertainties around US trade policies—especially with the impending expiry of a tariff pause initiated during Donald Trump’s administration—could pose risks. Added to this, some major customers are weighing alternatives like developing their own chips to better manage costs.
Despite these headwinds, experts remain confident about Nvidia’s prospects. Aziz Hamzaogullari of Loomis Sayles & Co. believes that the ongoing AI boom will continue to fuel Nvidia’s success, even if spending experiences brief slowdowns. With stock trading at 32 times projected earnings, Nvidia still presents an attractive proposition compared to the broader market.
