It wasn't all that long ago that Nvidia (NVDA 1.44%) stock seemed ordained to join an exclusive group of the most valuable companies on the planet. On Nov. 29, 2021, the stock peaked at an all-time high of $333.76, pushing its market cap above $847 billion. With numerous secular tailwinds fueling its stratospheric rise, Nvidia seemed destined to join the trillion-dollar club.

However, deteriorating market conditions, soaring inflation, and geopolitical turmoil have weighed on the stock, which -- at one point -- had shed roughly two-thirds of its value.

Yet the accelerating adoption of cloud computing and artificial intelligence (AI) have helped spark a rebound. Can Nvidia continue its trajectory and finally join the ranks of the 13-digit club by 2025? Should investors buy in anticipation of the stock surpassing this benchmark or avoid Nvidia because of its higher valuation and the lingering macroeconomic issues? Let's take a closer look.

A processor standing up and one laying on its side.

NVIDIA DGX Systems, the world's first portfolio of purpose-built AI supercomputers. Image source: Nvidia.

What's been weighing on Nvidia stock?

Nvidia pioneered the modern graphics processing unit (GPU), and the company's gaming segment has long been its cash cow. Over the past year, however, rampant inflation has had gamers thinking twice about upgrading to the latest processor. As a result, Nvidia's gaming revenue has declined year over year in each of the preceding three quarters, down 46%, 51%, and 33%, respectively. 

Despite the struggling economy, Nvidia continues to lead the discrete desktop GPU market with a dominant 85% share, leaving its rivals to fight over scraps. Perhaps more importantly, the PC market may be nearing a rebound. While Morgan Stanley analyst Erik Woodring cut his 2023 PC estimates, he believes the market may be near its bottom, with a recovery beginning as soon as the current quarter. 

What could drive Nvidia stock higher?

A rebound in the gaming market could be just one of a number of catalysts that could fuel a stock price rally.

One of the continuing tailwinds is the ongoing migration of cloud computing by large and small businesses alike. The ability to access business systems and software from anywhere provides staff and executives with unrivaled convenience. Nvidia's state-of-the-art processors are a staple for each of the world's largest cloud providers, and that secular trend is expected to continue, which is expected to help drive the stock higher. In fact, the global cloud computing market is expected to grow from $406 billion in 2021 to more than $1.7 trillion by 2029, a compound annual growth rate (CAGR) of nearly 20%, according to data compiled by Fortune Business Insights. 

The most recent driver, however, is the rapid adoption of AI, sparked by the emergence of next-generation chatbots, including ChatGPT from Microsoft-backed OpenAI and Alphabet's Google Bard. The human-like responses of these chatbots has captured the public imagination and has businesses scrambling to join the AI revolution. But this is just one facet of a market that's expected to surge over the next several years. The global AI market capped out at nearly $120 billion in 2022 and is expected to soar to $1.59 trillion by 2030, according to Precedence Research. This swift expansion could represent the next big growth market for Nvidia, helping fuel additional gains for shareholders. 

Will Nvidia be a trillion-dollar stock by 2025?

Nvidia stock is already on the road to recovery, having surged 144% from its October low. That rebound has compounded the stock's already pricey valuation -- it's currently selling for 18 times next year's sales. That said, Wall Street is increasingly bullish on Nvidia's prospects, with more than a dozen analysts raising their price targets on the stock over the past two weeks alone.

Wells Fargo analyst Aaron Rakers is among Nvidia's biggest cheerleaders, with an overweight (buy) rating and a $320 price target for the coming year. He cited the company's plans to roll out a host of hardware and software that facilitates the adoption of AI for companies of all sizes. Tigress Financial went further, noting the multiple product and partnership announcements "highlight the company's strengths and position it for a new AI-driven business upcycle and growth acceleration." 

If the stock reaches $320 over the coming year, that will push Nvidia's market cap above $812 billion, putting it within striking distance of the impressive $1 trillion watermark. Plus, given the stock's CAGR of 35% over the past five years, if Nvidia continues along its current trajectory, it could easily become a trillion-dollar stock by 2025. In fact, I would suggest it's likely.