Wall Street predicts Nvidia could reach $5 trillion valuation by 2026, driven by AI growth

From Nasdaq: 2024-10-22 04:34:00

Nvidia’s stock has surged to all-time highs, with a market cap of $3.38 trillion, second only to Apple. Wall Street analysts predict Nvidia could reach a $5 trillion valuation by 2026, driven by the AI revolution and new chip technology like Hopper, Blackwell, and Rubin. However, competition and industry dynamics pose risks to Nvidia’s growth.

Recent predictions suggest the AI data center chip market could reach $500 billion by 2028, up from $45 billion in 2023. Wall Street analysts have set high price targets for Nvidia, with boutique firm Rosenblatt’s target at $200, just shy of a $5 trillion market cap. Bank of America raised its target to $190, citing strong cash flow margins and growth potential.

Nvidia’s path to $5 trillion relies on continued AI growth and maintaining a high multiple. Risks include potential competition erosion of Nvidia’s competitive moat. While the AI revolution is expected to continue, alternatives and pricing pressure could challenge Nvidia’s market dominance. The industry’s shift to inferencing also poses a threat to Nvidia’s high-profit margins.

Investors should watch for developments in the AI market, as Nvidia faces evolving competition and changing industry dynamics. Whether Nvidia can maintain its lead in both high-end training and everyday inferencing remains uncertain. Investors should stay informed on AI trends and be ready to adjust their investment thesis as new data emerges.



Read more at Nasdaq: Wall Street Sees Nvidia Hitting $5 Trillion by 2026: Could It Happen?