The stunning rally in Nvidia (NVDA:NASDAQ) stock could be far from over, with one analyst believing that the AI (artificial intelligence) chip designer could see its market cap smash through the $5 trillion level during 2025.
So says Louis Navellier, chief investment officer and founder of Navellier & Associates, the analysis firm he runs. Navellier predicts that Nvidia stock could break $200 next year if it gets its Blackwell chips into production as anticipated.
Blackwell is Nvidia’s next generation AI platform, designed to power AI capabilities for businesses.
The Santa Clara, California firm’s substantial investment in next generation generative AI chips is among the key drivers behind Nvidia’s dominance in this rapidly emerging technology space, according to Navellier, He claims that Nvidia’s $2 billion expenditure renders competitor efforts ‘increasingly futile’ due to Nvidia’s superior technology.
Navellier goes as far as to suggest Nvidia is single-handedly leading the stock market, prompting Bloomberg TV to declare the S&P 500’s ‘Magnificent Seven’ has become ‘the Magnificent One and 499 other stocks’.
In June, Nvidia unveiled Rubin, a successor to Blackwell that will launch in 2026, showing that the company is not resting on its laurels. The company will also launch a new CPU (central processing unit) platform dubbed Vera the same year, Nvidia’s chief executive Jensen Huang said in a keynote address at National Taiwan University at the start of the month.
Nvidia has already ripped up Wall Street records. It took Apple (AAPL:NASDAQ) about five years to bridge the $1 trillion to $3 trillion market cap gap, Microsoft about the same. Nvidia did it in barely a year.
The question facing investors is what a $5 trillion market cap would mean for the stock’s valuation. Based on Koyfin consensus data, the stock currently trades on a fiscal 2025 (to 31 January) PE (price to earnings) multiple of around 43, falling to 28 by 2027.
Applying a $200 share price to those same forecasts would increase the 2027 PE to about 48.
Crucial to future valuation will be the direction of forecasts, and whether they stay roughly where they are or shift higher over time. The latter seems possible at least given Nvidia’s run of forecast-beating quarterly reports that have seen analysts rethink estimates repeatedly.
Earnings and revenue estimates for the current year (to 31 January 2025) have doubled over the past 12 months, and fiscal 2026 estimates are already 30% higher than they were, implying that Wall Street analysts have consistently underestimated Nvidia’s growth potential.
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