Nvidia Reaches $4 Trillion Market Capitalization
Nvidia (NASDAQ: NVDA) made history on July 9 and 10 by briefly surpassing a $4 trillion market capitalization, the first company to achieve this milestone. This significant valuation underscores the bullish market sentiment regarding AI infrastructure, as Nvidia’s growth is closely linked to the expansion of AI data centers.
Key Growth Drivers and Future Potential
The company has experienced rapid growth, reaching the $1 trillion mark just two years ago. Analysts project global data center capital expenditures will increase from $400 billion in 2024 to $1 trillion by 2028, fueling Nvidia’s future growth. Furthermore, an aging installed base of GPUs presents ongoing replacement revenue opportunities.
Valuation Concerns Amidst Growth Potential
Despite the growth outlook, Nvidia’s stock is currently trading at 38 times forward earnings. Analysts expect around 26% revenue growth for FY 2027. Investors remain cautious about whether such growth justifies the high valuation, especially as Nvidia approaches the next milestone of $5 trillion.
