Nvidia (NVDA 1.94%) hit a record-setting milestone on Wednesday, July 9, changing into the primary publicly traded firm to succeed in $4 trillion in market capitalization. The semiconductor firm briefly reached the landmark as Nvidia inventory rose greater than 2% in early buying and selling. The market cap moved right down to $3.97 trillion by mid-afternoon.
Let’s put the achievement into perspective. There are solely 10 corporations on this planet which have a market capitalization of greater than $1 trillion, and Nvidia has surpassed all of them in such a comparatively quick time. Nvidia itself was valued at lower than $1 trillion simply over 25 months in the past.
What comes subsequent? Does Nvidia seem to be a lock to someday attain a $5 trillion market cap? Will traders see that occuring in 2025?
Picture supply: Nvidia.
Nvidia’s superb journey
In case you’re into private computer systems, you’ve got recognized about Nvidia for some time. Its graphics processing items (GPUs) have been greatest recognized for years because the go-to product for avid gamers who wished the very best visible expertise. Its merchandise additionally bought pulled into the rising curiosity in cryptocurrencies again within the late 2010s as a result of they might be modified to assist energy the very best cryptocurrency mining operations.
But it surely wasn’t till late 2022 and early 2023, when generative synthetic intelligence (AI) entered the general public realm, that Nvidia inventory exploded. Nvidia’s GPUs are parallel processing chips, which implies they’ll deal with complicated calculations that may be divided into smaller duties and dealt with concurrently.
AI calculations are carried out in parallel processors, and Nvidia’s GPUs will be mixed into clusters to work quicker and be extra highly effective. That is how the corporate got here to dominate the AI house, as its GPUs account for roughly 92% of the market house, based on Jon Peddie Analysis.
Nvidia reached the $1 trillion mark on Might 30, 2023, and the inventory skyrocketed 239% for the 12 months. Then in 2024, progress continued as Nvidia hit the $2 trillion mark on Feb. 23, 2024, and the $3 trillion mark lower than 4 months afterward June 5, 2024. For the complete 12 months, Nvidia inventory rose 171% in 2024.
That brings us to now. It took a bit greater than a 12 months for Nvidia’s market cap to go from $3 trillion to $4 trillion, because the inventory rose by 20% in that interval.
Can Nvidia get to $5 trillion this 12 months?
One of the best factor that Nvidia has going for it’s that its GPUs are nonetheless flying off the cabinets. CEO Jensen Huang mentioned the corporate is seeing large demand for its new Blackwell chips, that are 40 occasions extra highly effective than the favored Hopper chips.
Nvidia additionally sees an enormous alternative within the AI market as corporations work to construct out their knowledge facilities to coach massive language fashions (LLMs) to energy generative AI merchandise. The corporate has projected knowledge middle capital expenditures to extend from $400 billion in 2024 to greater than $1 trillion in 2028 — and Nvidia, as talked about earlier than, could be very more likely to get the lion’s share of that enterprise.
As well as, Nvidia’s CUDA software program platform is a big benefit as a result of it supplies instruments for builders engaged on AI fashions which can be powered by Nvidia GPUs. It will be very costly for any developer to change to a different platform, so Nvidia has a buyer base that is locked in for years to come back.
Now let’s take a look at the numbers. To get to a $5 trillion valuation, the Nvidia inventory value would want to go up one other 25% by the tip of the 12 months — to roughly $205 per share. Barclays analysts have already got a value goal of $200 for Nvidia, so it isn’t out of the query. Additionally, take into account that the consensus analyst estimate for full-year earnings per share is $4.29, which is a 66% improve from full-year earnings within the firm’s fiscal 2025 (which ended Jan. 26).
That is greater than sufficient to get to the magic quantity. And if Nvidia, which noticed income progress up 69% 12 months over 12 months within the first quarter of fiscal 2026 (ended April 27, 2025), can pull the same quantity for the Q2 earnings report on Aug. 27, the timeline to get to $5 trillion may shorten to late this 12 months.
The underside line
It appears practically sure that Nvidia might be a $5 trillion firm, sooner slightly than later. That is why I name Nvidia the one inventory I’d purchase and maintain endlessly. We most likely will not see the $5 trillion mark till someday in early 2026, however the August earnings report may make everybody readjust their pondering.
