Nvidia (NVDA) Stock: Charging Toward Wall Street’s First $6 Trillion Valuation

Nvidia’s relentless AI dominance sparks a trillion-dollar sprint—can anything stop the juggernaut?

The chipmaker turned AI overlord keeps rewriting the rules of market gravity. With data centers, gaming, and now autonomous systems fueling its fire, NVDA’s trajectory looks more like a space launch than a stock chart.

Wall Street’s new math: 6 trillion = 1 Nvidia? (We’ll see how that works out after the next Fed meeting.)

Meanwhile, hedge funds pile in like it’s 1999—because nothing says ‘prudent investing’ like chasing a stock that already ate the S&P 500 for breakfast.

TLDR

• Loop Capital analyst John Donovan set a new Street-high price target of $250 for Nvidia stock, implying a $6.1 trillion market cap
• Nvidia shipped an estimated 6.5 million GPUs this year with 7.5 million expected next year, with average selling prices topping $40,000
• The company maintains monopoly-like market share in AI-accelerated data center GPUs with gross margins above 70%
• Nvidia stock hit new records last week and surpassed Microsoft to become the world’s largest company by market cap
• Growing competition from AMD, Taiwan Semiconductor, and customers developing internal chips poses future challenges

Nvidia stock surged to fresh records last week. The AI chip giant now carries the crown as the world’s largest company by market cap.

The rally shows little sign of slowing down. Shares climbed 0.8% to $158.98 in premarket trading Monday.

Loop Capital analyst John Donovan just handed Nvidia investors another reason to cheer. He lifted his price target from $175 to $250 per share on June 25.

That target implies a market cap of $6.1 trillion if achieved. It WOULD make Nvidia Wall Street’s first company to reach that milestone.

Donovan’s Optimism stems from Nvidia’s continued dominance in AI chips. The company shipped an estimated 6.5 million GPUs this year.

Next year’s shipments are projected to reach 7.5 million units. These chips command average selling prices above $40,000.

Demand Outpaces Supply

Nvidia’s Hopper H100 and successor Blackwell GPUs remain consistently backlogged. Overwhelming demand has allowed the company to charge premium prices.

This pricing power has pushed gross margins north of 70%. The company enjoys a 100% to 300% pricing premium over direct rivals.

Cloud service providers continue driving demand higher. Governments, midsize cloud companies, and startups are all ramping up data center spending.

CoreWeave’s recent purchase of 250,000 Hopper chips exemplifies this trend. Startups are racing to secure compute capacity.

Nvidia has managed to grow into its valuation over the past year. The stock now trades at just 27 times forward earnings for fiscal 2027.

That’s relatively modest given the company’s explosive growth trajectory. Since late 2022, Nvidia’s market cap has rocketed from $360 billion to $3.76 trillion.

The company already holds monopoly-like market share in AI data center GPUs. CEO Jensen Huang’s aggressive innovation timeline brings new advanced GPUs to market annually.

Competition Heating Up

However, several headwinds could derail the rally. Most businesses aren’t generating positive returns on AI investments yet.

They also haven’t optimized existing AI solutions. This suggests investors may have overestimated early adoption rates.

Growing competitive pressure poses another challenge. Taiwan Semiconductor is ramping up chip production capacity.

Advanced Micro Devices is increasing output of its Instinct series AI chips. Direct competition is intensifying across the board.

Many of Nvidia’s top customers are developing internal GPUs. These chips trail Nvidia’s offerings in compute power but cost less and aren’t backordered.

Internal chips could claim valuable data center space. They might also delay future upgrade cycles and pressure Nvidia’s margins.

Nvidia’s valuation metrics remain stretched despite recent gains. The stock trades at nearly 26 times trailing sales.

That’s well above other “Magnificent Seven” stocks. History suggests such multiples aren’t sustainable long-term.

Previous next-big-thing trends have typically topped out at price-to-sales ratios of 30 to 43. Even Nvidia peaked at just over 42 last summer.

The AI revolution mirrors past technological shifts like the internet boom. Every game-changing innovation has experienced bubble-bursting events early in expansion.

Nvidia shares notched a five-day winning streak last week. The company surpassed Microsoft to claim the top market cap spot.

Other chip stocks also rallied Monday in premarket trading. AMD gained 1.2%, Broadcom jumped 1.6%, and Qualcomm added 0.7%.

Investors remain bullish on the TRUMP administration’s ability to broker favorable trade deals. When markets perform well, AI darling Nvidia typically benefits.