Nvidia Smashes Barriers: $4 Trillion Valuation Now Within Reach After Stunning Breakout

Nvidia's stock just pulled off a gravity-defying leap—again. The chipmaker's relentless rally has Wall Street whispering about a once-unthinkable milestone: the $4 trillion club.

Silicon Domination

No company has ever crossed the $4T mark. But Nvidia's AI-fueled ascent makes even Tesla's wildest runs look sluggish. The stock's latest surge—another 15% this month—puts it closer than ever to rewriting market history.

The AI Gold Rush

Every hedge fund manager and their golf buddy is now overweight Nvidia. Because nothing says 'prudent investing' like chasing a stock that's already quintupled in 18 months. The company's GPUs remain the undisputed picks and shovels of the generative AI boom—even if half the startups buying them won't exist in 2024.

The Final Frontier

At this pace, Nvidia could lap entire sectors before Labor Day. But remember kids: trees don't grow to the moon. Except maybe this one.

Tech giants keep buying Nvidia chips

Despite the market scare caused by DeepSeek earlier this year, analysts say the money hasn’t stopped flowing into AI infrastructure.

In fact, spending is climbing. Combined, the top four US tech firms are estimated to spend around $350 billion on capital expenses in the coming fiscal year, up from $310 billion. Over 40% of Nvidia’s revenue comes from just these companies. That means any increase in their budgets goes straight to the chip maker’s bottom line.

Investors are noticing. Ananda Baruah, an analyst at Loop Capital, just bumped Nvidia’s price target from $175 to $250, calling for a potential market value of $6 trillion if things keep going this way. He wrote in a research note on June 25 that Nvidia still controls “critical tech,” and he sees its control over pricing and margins as intact. He also expects AI-related spending from businesses and governments to rise to $2 trillion by 2028.

At the same time, Aziz Hamzaogullari, chief investment officer at Loomis, Sayles & Co., said his firm believes Nvidia will keep its lead “for the next decade-plus.” He sees the company as a Core part of a long-term trend that will transform how the world works, saying, “This is a secular structural change, and Nvidia remains one of the biggest beneficiaries.”

But not everyone’s convinced this momentum can last forever. Dan Davidowitz, who leads investment strategy at Polen Capital, raised some red flags. He said the biggest customers are now trying to build their own custom chips to cut down on Nvidia’s high costs.

“The valuation depends on the persistence of growth,” he said. “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.”

Trade tension, customer pivots could shake things

There are also geopolitical risks that could cut into Nvidia’s production. The company still relies heavily on Taiwan Semiconductor Manufacturing Co. (TSMC) to build its chips, which makes it vulnerable to trade decisions coming from Donald Trump’s WHITE House.

Trump’s current 90-day freeze on the harshest China tariffs expires on July 9, and there’s no clear signal on what he plans to do next. If tariffs hit Taiwan-made chips, Nvidia could face cost hikes or slowdowns overnight.

The stock’s valuation is also stretching. Right now, it’s trading at 32 times forward earnings, compared to 22 times for the S&P 500. That’s steep. And it puts even more pressure on the NVDA ticker to deliver nonstop growth. If demand even flattens, that multiple could collapse fast.

Still, Aziz doesn’t think that’s reason to panic. He said the long-term trend is bigger than short-term risks, and that Nvidia is positioned to stay on top—even if things get bumpy. “That doesn’t mean it will be steady Eddie all the time, that there won’t be disruptions in spending,” he said. “But the stock still looks attractive given that backdrop.”

Right now, Nvidia is about $220 billion away from the $4 trillion line. Investors seem ready to keep pushing. But they’ll be watching trade policy, customer chip development, and future earnings very closely.

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