Nvidia Breakout puts $4 trillion market value within reach

Two years after Nvidia Corp. made history by becoming the first chipmaker to achieve a market capitalization of $1 trillion, more notable milestones are within the reach of that.

The emergence of China’s deep shakes, which surprised concerns that stocks plummeted earlier this year, setting up slower spending on artificial intelligence infrastructure.

Its biggest customers continue to move forward with spending completely, with many of them flowing into computing systems. 67% profit from the April low pushed market capitalization to $3.8 trillion, overtaking Microsoft Corp. by $3.7 trillion, once again becoming the most valuable company in the world. Nvidia’s shares closed at another record high, rising 1.8% on Friday.

With Nvidia’s latest AI accelerator and a customer base expanding its competitors still far apart, the Bulls bets that there is plenty of room for chipmaker stocks.

“We’re looking forward to seeing you in the future,” said Aziz Hamzaogullari, Founder, Chief Investment Officer and Portfolio Manager of Loomis, Sayles & Co’s Growth Equity Strategy Team.

Hamzaogullari is not alone. This week, Loop Capital Analyst Anandavarua raised Nvidia’s price target to $250 from $175, a level equivalent to a market value of around $6 trillion. Barua, who has a stock purchase rating, expects annual AI spending from various types of customers to rise to around $2 trillion by 2028.

“It may be great that Nvidia Fundamentals can continue to amplify from current levels, but it reminds people that Nvidia is essentially a monopoly of critical technology and has the power of price (and margins),” Baruah wrote in a June 25th research note.

The bullish sentiment behind other manufacturers of Nvidia and AI Gear is a tough reversal since the beginning of the year when the emergence of sophisticated chatbots like Deepseek developed relatively cheaply in China, and when Nvidia customers caused fears of cutting spending. Instead, the US tech giants are cultivating even more money into their computing infrastructure.

Microsoft, Meta, Amazon.com Inc. and Alphabet Inc. are projected to put about $350 billion in capital expenditures in the upcoming fiscal year, which rises from $310 billion, according to an average analyst estimate compiled by Bloomberg. These companies account for more than 40% of NVIDIA’s revenue.

Of course, there are still many risks that could derail Nvidia’s gatherings. The company relies on Taiwanese semiconductor manufacturers to produce chips, exposing Nvidia to US President Donald Trump’s trade policy. Trump’s 90-day suspension at its hardest tariffs is expected to end on July 9th.

At the same time, there is no guarantee that Nvidia’s biggest customers will not change songs with their spending over the next few years. Many of them develop their own chips to avoid the sudden price that Nvidia directs.

“The valuation relies on sustainable growth and we already know that Nvidia’s biggest customers are trying to find ways to make spending more efficient, not just on Nvidia, but also on off-roading to their own silicon.”

“To get used to valuations, you need very robust assumptions. You don’t have a good view of what that demand looks like.”

NVIDIA stock is priced at 32x revenues forecast over the next 12 months, compared to 22x the S&P 500.

This stock valuation doesn’t bother Loomis Sayles’ Hamzaogullari, who is confident that AI will transform society and believes Nvidia is a key winner in increasing productivity from technology.

“That doesn’t mean it’s always a stable eddy, it means there’s no disruption in spending, but this is a secular structural change and Nvidia remains one of the biggest beneficiaries,” Hamzaogullari said. “Given that background, the inventory still looks attractive.”

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