Nvidia stock reaches new record close amid increasing optimism for AI demand
Nvidia nears top spot in market cap, driven by AI chip demand. With a market value of $3.386 trillion, it edges closer to Apple as one of only three $3T+ companies.
Nvidia (NVDA) shares climbed again on Monday following positive remarks from Wall Street analysts. The stock rose 2.4%, reaching a record closing high of $138.07, nearly tripling in value this year due to the rising demand for its AI-supporting chips. The stock remains just below its June intraday peak of $140.76.
Several companies linked to Nvidia, such as partners Arm Holdings (ARM), TSMC (TSM), and Nvidia-backed Soundhound AI (SOUN), also saw gains on Monday. These moves helped lift the tech sector, pushing the S&P 500 index to a new record high.
Nvidia 'remains dominant'
In a Sunday note to clients, Citi analysts emphasized that Nvidia continues to dominate the AI accelerator market, referring to the company as "still king" in terms of its extensive customer base. They forecast that Nvidia’s GPU sales to major cloud providers, such as Google (GOOGL) and Microsoft (MSFT), will double this year, reflecting the soaring demand for AI-related technology.
Among the 22 analysts tracking Nvidia through Visible Alpha, all but one have issued a "buy" or equivalent rating on the stock. The consensus price target stands at $152.41, suggesting approximately 10% potential upside from Monday's record closing price of $138.07. This reflects continued confidence in Nvidia's leadership within the AI chip sector and its expected growth trajectory.
Supply 'expected to remain tight'
Following Citi's optimistic outlook, Goldman Sachs analysts shared insights from their Friday meeting with Nvidia CEO Jensen Huang, expressing a deeper understanding of the company’s strong competitive advantage. They highlighted Nvidia's expansive customer base, its "robust and growing" software ecosystem, and its continual innovation as key factors reinforcing its leadership position.
The analysts also noted that orders for Nvidia’s next-generation Blackwell chip are fully booked, with lead times stretching up to a year. Nvidia anticipates that supply will remain constrained for the foreseeable future due to overwhelming demand for its cutting-edge AI hardware.
Goldman Sachs reaffirmed its "buy" rating on Nvidia and increased its price target from $135 to $150, reflecting confidence in the company’s growth potential and sustained market dominance despite supply challenges.
Nvidia approaching top market cap position
Last week, Nvidia surpassed Microsoft to become the world's second-largest company by market capitalization, trailing only Apple (AAPL). This milestone solidified Nvidia's position among the tech giants.
With Monday's stock gains, Nvidia's market cap has surged to $3.386 trillion, closing the gap with Apple's $3.516 trillion. Currently, Apple, Nvidia, and Microsoft are the only companies in the world with market capitalizations exceeding $3 trillion. Nvidia's rapid growth, fueled by skyrocketing demand for its AI chips, has propelled it closer to potentially overtaking Apple as the most valuable company globally. This achievement underscores the company's dominant role in the technology sector and the increasing importance of AI in driving market leadership.
