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NVIDIA’s Path to a $6 Trillion Valuation: What You Need to Know

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NVIDIA (NVDA) has been making waves in the stock market, and analysts like Loop Capital’s Ananda Baruah are incredibly bullish about its future. Recently, Baruah set an ambitious $250 price target for NVIDIA, which would push its market capitalization to a staggering $6 trillion.
NVIDIA’s Path to a  Trillion Valuation: What You Need to Know
But what’s behind this bold prediction? According to Loop Capital, NVIDIA is poised for explosive growth, driven by advancements in AI and the ever-growing demand for GPUs.

Currently, NVIDIA controls just 15% of the global compute capacity, but that number is expected to skyrocket as GPUs become a dominant force in the market. Loop Capital’s supply chain analyst, John Donovan, predicts GPU spending could reach $2 trillion by 2028. This would represent 50-60% of global installed compute capacity, further solidifying NVIDIA’s place as a market leader in AI infrastructure.

NVIDIA has already shown that each gigawatt of new AI infrastructure contributes $40 billion to $50 billion in revenue. With 20GW of AI infrastructure in the pipeline, the company could rake in $1 trillion in revenue. Given this trajectory, NVIDIA’s next growth phase will likely be powered by hyperscalers, sovereign AI data centers, generative AI, and AI-accelerated computing.

Despite these rosy projections, there are some who remain skeptical. For instance, Bank of America’s Vivek Arya expects the overall AI market to be worth just $1 trillion by 2030, making his outlook more cautious. But regardless of the varying perspectives, Loop Capital is anticipating NVIDIA will ship 6.5 million GPUs in 2025 and 7.5 million in 2026, with an average selling price (ASP) of over $40,000 per unit.

Of course, there’s always the possibility that NVIDIA might not reach a $6 trillion valuation, even if it meets its ambitious shipping targets. A potential compression of its price-to-earnings (P/E) ratio could prevent such an astronomical rise in valuation. However, with shares up 3% at the time of writing, NVIDIA has already demonstrated strong growth, with the stock up 10% so far this year.

With NVIDIA’s future appearing as bright as ever, investors are left to wonder just how high the stock can soar. While some analysts are calling for a cautious approach, others are betting big on the company’s continued success in AI and GPU markets.

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