At once, there are only three corporations on this planet with a market cap of no less than $3 trillion. These corporations are Apple, Nvidia(NASDAQ: NVDA), and Microsoft — each of that are playing a significant role in the continuing artificial intelligence (AI) saga.
While Apple currently stands within the lead with a market cap around $3.8 trillion, I see Nvidia because the almost definitely among the many trio to achieve a $4 trillion valuation first.
I’ll detail Nvidia’s tailwinds and make the case why I feel the semiconductor darling has some major upside heading into 2025.
During the last two years, Nvidia’s business has experienced something of a renaissance. While the corporate’s original focus was on enhanced graphics performance for video games, Nvidia discovered that its graphics processing unit (GPU) chipsets could possibly be integral for generative AI development.
Given Nvidia’s existing inroads within the GPU realm, the corporate has faced little or no competition since AI emerged as a megatrend a few years ago. Because of this, the corporate has been capable of command high levels of pricing power for its chips, which has led to record revenue and profit growth for the corporate.
Furthermore, demand for Nvidia’s Hopper GPUs has helped the corporate acquire nearly 90% of the GPU market — a trend that might actually proceed climbing higher.
In 2025, the narrative around Nvidia goes to surround on item: the corporate’s next-generation Blackwell GPU architecture. In response to industry analyst Beth Kindig, production of Blackwell GPUs is predicted to triple between the present quarter (Q4) and the primary quarter of 2025.
While it’s difficult to evaluate what these figures will translate to by way of dollars, I see the rising production estimates as a great proxy for Nvidia’s near-term growth.
Although shares of Nvidia gained roughly 170% in 2024, the stock has taken a breather over the past month or so. I feel one reason for the slight sell-off pertains to the Blackwell launch, as there may be clearly rather a lot riding on Nvidia’s ability to execute and maintain its position as the highest chip business. Should the Blackwell launch exceed expectations (which appears likely), I feel it’s reasonable that Nvidia stock will witness some latest life and shares could begin soaring once more.
In contrast, while Apple and Microsoft each have catalysts of their very own, resembling the iPhone 16 equipped with Apple Intelligence and demand for Azure cloud computing infrastructure, I do not think either of those opportunities carry the identical upside in comparison with what Blackwell could mean for Nvidia.
Image source: Getty Images.
At once, Nvidia’s market cap hovers around $3.3 trillion. So as to reach the $4 trillion milestone, Nvidia’s value would wish to extend by roughly 21%.
While a move of this magnitude is actually achievable, it is important to take into accout that Nvidia executed a 10-for-1 stock split earlier in 2024. For the reason that company’s outstanding share count is now higher by tenfold, it’s highly unlikely that Nvidia stock will experience a 20% gain in a matter of just a couple of trading days.
I feel to ensure that Nvidia shares to rise by one other 20% or more, the corporate goes to wish to show consistent growth around Blackwell and the information center business as an entire. As such, I feel smaller, incremental moves will occur in Nvidia stock throughout 2025 as more information becomes public related to Blackwell.
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Adam Spatacco has positions in Apple, Microsoft, and Nvidia. The Motley Idiot has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Idiot recommends the next options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure policy.
