Prediction: Nvidia Will Be the First AI Company to Achieve a $4 Trillion Valuation by 2025

Currently, only three companies have reached a market cap exceeding $3 trillion. These companies are Apple, Nvidia, and Microsoft. Each of them is significantly contributing to the growing field of artificial intelligence (AI).

As it stands, Apple is at the forefront with a market cap of about $3.8 trillion, but I believe that Nvidia is set to be the first among these companies to reach a $4 trillion valuation.

Below, I will discuss the advantages that Nvidia has and explain why this semiconductor company is poised for significant growth as we approach 2025.

Why Nvidia Could Be First to $4 Trillion

In the past two years, Nvidia's business has undergone a transformation. Originally focused on improving graphics for video games, Nvidia realized that its graphics processing unit (GPU) chipsets play a crucial role in the development of generative AI.

With its established presence in the GPU market, Nvidia has faced little competition since AI became a major trend. This advantage has allowed the company to maintain high pricing power for its chips, which, in turn, has resulted in exceptional revenue and profit growth.

The demand for Nvidia's Hopper GPUs has been remarkable, allowing it to capture almost 90% of the GPU market, with potential for further growth.

Looking forward to 2025, a key focus will be on Nvidia's upcoming Blackwell GPU architecture. Industry expert Beth Kindig reports that production of these GPUs is anticipated to increase significantly—expected to triple from the current quarter to the first quarter of 2025.

According to analyses, Blackwell production could rise from 250,000-300,000 units in the fourth quarter to 750,000-800,000 units in the first quarter. While it's challenging to predict the financial implications of these production figures, they are likely indicative of Nvidia's near-term growth potential.

Nvidia's shares surged by about 170% in 2024, although there has been a slight decline recently. This downturn might be due to the upcoming Blackwell launch, as Nvidia's success in maintaining its leadership in the chip market is highly anticipated. If the launch exceeds expectations, it could rejuvenate Nvidia's stock price.

In contrast, while Apple and Microsoft have their own growth prospects—such as the anticipated iPhone 16 equipped with Apple Intelligence and the growing Azure cloud services—I believe these factors do not provide the same robust upside as the potential of the Blackwell launch for Nvidia.

What This Means for Nvidia Investors

Nvidia's current market cap is approximately $3.3 trillion. For it to achieve a $4 trillion valuation, the company would need to increase its value by about 21%.

Though this growth is certainly feasible, it's essential to consider that Nvidia recently carried out a 10-for-1 stock split earlier in 2024. As a result, the number of outstanding shares has increased tenfold, making a rapid 20% gain less likely in just a few trading days.

For Nvidia's stock to rise by 20% or more, consistent growth regarding Blackwell and the overall data center business will be critical. Therefore, I predict that Nvidia stock will experience smaller, gradual increases throughout 2025 as more news about Blackwell comes to light.

Author has positions in Apple, Microsoft, and Nvidia. The author believes in these companies' potential for growth in the AI sector.

Prediction, Nvidia, MarketCap