Nvidia has achieved a significant milestone in the market as its market capitalization crossed the $2 trillion mark on Friday. This achievement positions Nvidia to potentially become the third U.S. company in history to close at that extraordinary level.
Steady Climb in Share Value
Boosted by strong earnings, shares of the chip maker continued to climb on Friday following substantial gains on Thursday. The stock was trading up by 1% at $792.67 in the afternoon, slightly below earlier peak values. If the stock manages to close above $800, Nvidia’s market value will exceed $2 trillion.
Following in the Footsteps of Giants
Currently, only Apple and Microsoft have managed to close at this elite level. Both companies took over two years to reach this milestone after crossing the $1 trillion threshold. In contrast, Nvidia is on track to achieve this feat in less than a year, having first surpassed the $1 trillion mark back in June 2023.
Impressive Growth and Continued Dominance
After reporting outstanding earnings, Nvidia’s stock surged by 16% to close at $785.38 on Thursday, resulting in a market valuation of $1.96 trillion. The company’s position as a leading provider of hardware for artificial intelligence systems has propelled its rapid growth, surpassing even the prominence of other major tech stocks.
Market Watch
Despite its exceptional performance, analysts are cautiously observing Nvidia’s trajectory for any signs of potential deceleration in its growth. Notably, UBS analyst Timothy Arcuri recently adjusted his price target for the stock, departing from the prevalent trend of praising Nvidia’s achievements.
Overall, Nvidia’s remarkable journey to the $2 trillion milestone underscores its unwavering position as a powerhouse in the tech industry.
Arcuri’s Assessment on Nvidia
Arcuri recently revised his target price on Nvidia, reducing it to $800 from $850 following the latest earnings report. Despite predicting a potential slowdown in revenue growth, he maintained a Buy rating on the stock. The new target price was determined based on a price-to-earnings multiple of 25 times the UBS forecast for Nvidia’s earnings in 2025.
Analysis and Conclusions
Arcuri expressed some surprise at the slight decline in total supply quarter-on-quarter (Q/Q), leading to the hypothesis that Nvidia might be reaching a ‘steady state’ in revenue for the upcoming quarters. Without any further supply increases, Arcuri calculated that Nvidia could sustain revenue close to $27 billion per quarter, a significant increase from $22.1 billion reported for the previous quarter in January.
Market Performance
So far this year, Nvidia shares have surged by 59%, outperforming both the S&P 500 and the Nasdaq Composite, which saw gains of 6.7% and 6.9%, respectively, during the same period.