Two years after Nvidia Corp made history by becoming the first chipmaker to achieve a US$1 trillion market capitalization, an even more remarkable milestone is within its grasp: becoming the first company to reach US$4 trillion.
After the emergence of China’s DeepSeek (深度求索) sent the stock plunging earlier this year and stoked concerns that outlays on artificial intelligence (AI) infrastructure were set to slow, Nvidia shares have rallied back to a record.
The company’s biggest customers remain full steam ahead on spending, much of which is flowing to its computing systems. Microsoft Corp, Meta Platforms Inc, Amazon.com Inc and Alphabet Inc are projected to put about US$350 billion into capital expenditures in their upcoming fiscal years, up from US$310 billion in the current year, according to the average of analyst estimates compiled by Bloomberg. Those companies account for more than 40 percent of Nvidia’s revenue.
Photo: Ann Wang, Reuters
A 67 percent gain from an April low has pushed Nvidia’s market capitalization to US$3.8 trillion, overtaking Microsoft at US$3.7 trillion to again become the world’s most valuable company. Nvidia shares rose 1.8 percent on Friday to close at another record high.
With a broadening customer base clamoring for Nvidia’s latest AI accelerators and competitors still distant, bulls are betting the chipmaker’s shares have plenty of room to run.
“We believe that Nvidia is truly uniquely positioned, and that it will sustain its position over the next decade-plus,” said Aziz Hamzaogullari, founder, chief investment officer and portfolio manager of the growth equity strategies team at Loomis, Sayles & Co.
Hamzaogullari is not alone. Loop Capital Markets LLC analyst Ananda Baruah raised Nvidia’s price target to US$250 from US$175, a level that would equate to about a US$6 trillion market value. Baruah, who has a buy rating on the stock, expects annual AI spending from various types of customers to rise to nearly US$2 trillion by 2028.
“While it may seem fantastic that Nvidia fundamentals can continue to amplify from current levels, we remind folks that Nvidia remains essentially a monopoly for critical tech, and that it has pricing (and margin) power,” Baruah wrote in a research note on Wednesday.
Meanwhile, Nvidia insiders sold more than US$1 billion worth of company stock in the past year, with a notable uptick in recent trading activity as executives capitalize on surging investor interest in AI, the Financial Times reported yesterday.
More than US$500 million of the share sales took place this month as the California-based chip designer’s share price climbed to an all-time high, the report said.
Nvidia chief executive officer Jensen Huang (黃仁勳) started selling shares this week for the first time since September last year, the US Securities and Exchange Commission’s filing showed.
Additional reporting by Reuters
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