Semiconductor giant Nvidia (NVDA) has reached new milestones in market capitalization at an unprecedented pace. Last year he joined the $1 Trillion Market Cap Clubas its valuation surpassed $2 trillion in February this year. By June, it was a $3 trillion monsterthus becoming the third company to achieve this feat.

Nvidia’s rally – both in percentage and absolute terms – looks like a Cinderella story. In doing so, the chip design giant the market capitalization even exceeded that of Apple(AAPL)which would have been unthinkable just a few years ago.

NVDA was the best performing S&P 500 index ($SPX) constituting last year, with gains of almost 240%. This year’s performance was “modest” by this criterionbut chip stock is still up 179% for 2024 and is among the The Top Five Gainers in the S&P 500 Index YTD.

In this article, we’ll look at NVDA’s forecast for 2025 – but before that, let’s take a look at why the stock has pulled back from its highs.

Why is Nvidia stock falling?

Nvidia shares fell under their own weight, and despite beating estimates in its fiscal 2025 third quarter earnings report, the stock still closed in the red after last month’s results. We also saw a similar price action at NVDA following the release of its second quarter results.

As has generally been the case with Nvidia, markets start pricing in an expected profit well before the confessional, so the actual pace announced fails to excite investors unless it is truly significant. Simply put, “great, not good” is what the markets expect from Nvidia after its stunning rally.

However, given Nvidia’s size – its revenues are expected to be around $130 billion this fiscal year – large-scale performances of the type it has achieved in the past have become difficult to achieve, at least in terms of percentage.

Apprehensions have also been expressed about how the president-elect Trump’s tariff agenda could impact Nvidia. The company’s supply chain is concentrated in Taiwan, while China remains one of its key markets, despite US restrictions on exporting high-end artificial intelligence (AI) chips to that country Communist.

Then there are intermittent concerns about the sustainability of Nvidia’s growth and, relatedly, its valuations. Additionally, fears of competitors catching up with Nvidia remain a significant risk.

Will NVDA stock rise?

Those who have followed Nvidia over the past couple of years will attest to the fact that the stock tends to take a break after each rally and then embark on the next leg of its uptrend. Usually, the best time to buy Nvidia is during these periods of weakness, when the stock is trading sideways with a negative bias.

While NVDA stock fell after the company reported its third-quarter results, it was difficult to find gaps in the report. As Wedbush analyst and longtime Nvidia bull Dan Ives said: the winnings were “impeccable” and “should be framed and hung in the Louvre.”

Notably, during the earnings conference call, Nvidia said it now expects sales of its next-generation Blackwell chips to be higher than it previously anticipated.

Nvidia Stock Price Prediction 2025

After Nvidia’s third-quarter earnings release, several brokerages increased their target price for the stock. Sell-side analysts remain as bullish as ever on NVDA stock, with 39 of 43 analysts covered rating it a “strong buy” or a “moderate buy.” The remaining 4 analysts rate NVDA as a ‘Hold’ and there is no ‘Sell’ rating.

Nvidia’s average price target of $173.06 is 25% higher than Friday’s closing prices and would imply its market cap. surpass $4 trillion over the next 12 months. If Nvidia stock reached its target price of $220, its market cap be well north of $5 trillion.

Can Nvidia become a $5 trillion company?

Nothing has been able to stop the AI ​​euphoria, and continued spending by companies – large and small – on AI has kept Nvidia’s cash registers buzzing. The Jensen Huang-led company’s revenue more than doubled in the last fiscal year, and while growth has surpassed those peaks, its sales are also expected to double this fiscal year. For the next fiscal year, analysts are modeling revenue growth of 51%, which is by no means low and is the highest growth expected by a major technology company.

While Nvidia expects some pressure on its gross margins in the near term as Blackwell sales accelerate, management expects margins to increase thereafter, and Chief financial officer Colette Kress said margins are expected to rise back to the mid-70s “fairly quickly.”

Looking at the long term situation, Bank of America expects revenue from Nvidia’s Data Center segment is expected to exceed $300 billion by the end of this decade. The segment sells AI chips and is by far the company’s largest segment, having long eclipsed revenue from its once-dominant gaming segment.

NVDA shares don’t look that expensive, with a forward 12-month price-to-earnings (PE) multiple (NTM) of 35x. Nvidia has a lot of growth ahead, and the stock still has room to rise from these levels.

In the meantime, despite all the euphoria around AIfew companies have managed to monetize this technology in a meaningful way, even amid huge expenses. This remains, in my view, the biggest risk to Nvidia’s growth, as the inability of tech companies to monetize investments in AI could mean they end up facing shareholder wrath to cut investments in AI, which would hurt Nvidia’s revenue.

On the date of publication, Mohit Oberoi held a position in: NVDA , AAPL . All information and data contained in this article are for informational purposes only. For more information, please see the Bar Chart Disclosure Policy. here.