Nvidia's latest breakout leads it closer to the elusive $4T valuation

Nvidia just pulled off another massive comeback on Wall Street, pushing its market value to $3.78 trillion, bringing it within striking distance of $4 trillion.

This happened after a sharp rebound from a dip earlier in the year triggered by China’s DeepSeek, a budget-built AI model that caused panic about a slowdown in spending on artificial intelligence.

But instead of freezing up, the company’s largest customers kept pouring cash into Jensen Huang’s computing gear, helping the firm leap ahead of Microsoft, now worth $3.70 trillion, to reclaim the top spot as the world’s most valuable company.

The report came from Bloomberg, which detailed how Nvidia, two years after being the first chipmaker to cross $1 trillion, is now on pace to become the first company in any sector to cross $4 trillion. What got it here? A 64% jump in share price since April, driven by relentless demand for its AI accelerators.

The same AI tools Big Tech is using to build their own generative models are all powered by Nvidia hardware. There’s no real competitor in sight right now. And as long as Meta, Alphabet, Microsoft, and Amazon keep investing in this tech, this growth story isn’t stopping.

Tech giants keep buying Nvidia chips

Despite the market scare caused by DeepSeek earlier this year, analysts say the money hasn’t stopped flowing into AI infrastructure.

In fact, spending is climbing. Combined, the top four US tech firms are estimated to spend around $350 billion on capital expenses in the coming fiscal year, up from $310 billion. Over 40% of Nvidia’s revenue comes from just these companies. That means any increase in their budgets goes straight to the chip maker’s bottom line.

Investors are noticing. Ananda Baruah, an analyst at Loop Capital, just bumped Nvidia’s price target from $175 to $250, calling for a potential market value of $6 trillion if things keep going this way. He wrote in a research note on June 25 that Nvidia still controls “critical tech,” and he sees its control over pricing and margins as intact. He also expects AI-related spending from businesses and governments to rise to $2 trillion by 2028.

At the same time, Aziz Hamzaogullari, chief investment officer at Loomis, Sayles & Co., said his firm believes Nvidia will keep its lead “for the next decade-plus.” He sees the company as a core part of a long-term trend that will transform how the world works, saying, “This is a secular structural change, and Nvidia remains one of the biggest beneficiaries.”

But not everyone’s convinced this momentum can last forever. Dan Davidowitz, who leads investment strategy at Polen Capital, raised some red flags. He said the biggest customers are now trying to build their own custom chips to cut down on Nvidia’s high costs.

“The valuation depends on the persistence of growth,” he said. “We already know that Nvidia’s largest customers are trying to figure out ways to be more efficient with their spending, not just with Nvidia, but also offloading to their own silicon.”

Trade tension, customer pivots could shake things

There are also geopolitical risks that could cut into Nvidia’s production. The company still relies heavily on Taiwan Semiconductor Manufacturing Co. (TSMC) to build its chips, which makes it vulnerable to trade decisions coming from Donald Trump’s White House.

Trump’s current 90-day freeze on the harshest China tariffs expires on July 9, and there’s no clear signal on what he plans to do next. If tariffs hit Taiwan-made chips, Nvidia could face cost hikes or slowdowns overnight.

The stock’s valuation is also stretching. Right now, it’s trading at 32 times forward earnings, compared to 22 times for the S&P 500. That’s steep. And it puts even more pressure on the NVDA ticker to deliver nonstop growth. If demand even flattens, that multiple could collapse fast.

Still, Aziz doesn’t think that’s reason to panic. He said the long-term trend is bigger than short-term risks, and that Nvidia is positioned to stay on top—even if things get bumpy. “That doesn’t mean it will be steady Eddie all the time, that there won’t be disruptions in spending,” he said. “But the stock still looks attractive given that backdrop.”

Right now, Nvidia is about $220 billion away from the $4 trillion line. Investors seem ready to keep pushing. But they’ll be watching trade policy, customer chip development, and future earnings very closely.

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