More than 30 years ago, the advent and proliferation of the internet kicked off the greatest leap forward in technological innovation for businesses in a long time. Though a number of next-big-thing innovations have come along since the internet revolutionized how businesses interact with consumers and sell their products and services, none have come close to matching its long-term addressable potential... until now.
The rise of artificial intelligence (AI) represents the next great tech advancement that has the ability to alter the long-term growth trajectory for corporate America. Empowering software and systems with AI solutions to make decisions without human intervention gives this technology a jaw-dropping addressable market, which the analysts at PwC have pegged at $15.7 trillion (globally) by 2030.
Although a long list of companies has benefited from Wall Street's hottest trend, it's semiconductor titan Nvidia (NVDA 0.98%) that's become the face of the AI revolution. As is often the case with businesses on the leading edge of a game-changing innovation, predictions are all over the map.
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Whereas one Wall Street analyst foresees the most pivotal of all tech stocks soaring to $220 per share, another believes it'll plummet to just $100 per share. Yet what's most interesting is that Wall Street's high- and low-water price targets both completely overlook what can arguably be described as the biggest catalyst for Nvidia.
Is Nvidia a $5 trillion dollar business?
Make no mistake about it, the overwhelming majority of Wall Street analysts and investors believe Nvidia stock is headed higher. But none of these price projections speaks louder than analyst Ivan Feinseth at Tigress Financial, who foresees Nvidia shares adding 55% and heading to $220. If Feinseth is accurate, Nvidia's market cap would near $5.4 trillion. For context, Nvidia had a market valuation of $360 billion when 2023 began.
Feinseth's Street-high price target is predicated on sustained strong demand for Nvidia's graphics processing units (GPUs). The Hopper (H100) and successor Blackwell GPUs account for the lion's share of the GPUs currently deployed in AI-accelerated data centers, and demand for this hardware hasn't shown any signs of slowing.
As a general rule, when the demand for a good or service outstrips its supply, the price of said good or service is going to climb until demand tapers off. In Nvidia's case, its GPU orders are backlogged, which has allowed the company to charge a healthy premium for its hardware, relative to its direct external competitors. The end result has been a significant uptick in the company's gross margin, compared to prior to the AI revolution taking shape.
Feinseth's $220 price target, which was issued in late January, came after a short-lived plunge in Nvidia stock caused by the debut of China-based DeepSeek's R1 large language model (LLM) chatbot. DeepSeek is alleged to have used slower and less-costly hardware from Nvidia to develop its LLM. Feinseth's lofty price target demonstrates confidence that Nvidia will be able to maintain its superior pricing power.
Will Nvidia shares plunge 30%?
On the other end of the spectrum is Seaport Global Investors analyst Jay Goldberg. In late April, Goldberg became the only analyst covering Nvidia to rate its stock as a "sell," and initiated a $100 price target. Based on where Nvidia shares ended the session on June 6, Goldberg's price target intimates a decline of almost 30%.
Goldberg doesn't foresee Wall Street's AI darling losing its leading position as the preferred company powering AI-accelerated data centers. But he does believe that AI optimism is fully priced into Nvidia stock given a few variables.
To begin with, Goldberg notes that many of Nvidia's top customers by net sales are internally developing AI-GPUs and solutions of their own. Even though these chips won't represent external competition for Hopper, Blackwell, or any successor GPUs, they're going to be notably cheaper and more readily accessible than Nvidia's premium-priced and backlogged hardware. This is potentially problematic to Nvidia landing new orders from its current top customers.
Goldberg also believes that enterprise customers will branch out and purchase from other hardware providers. For instance, Advanced Micro Devices' less-costly Instinct MI300X series GPUs, as well as Broadcom's custom AI-accelerating chips, could siphon away some of Nvidia's monopoly like data center market share over time.
With enterprise spending on AI-data center infrastructure expected to slow in 2026, per Goldberg, Nvidia stock is currently pricey.
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Wall Street's high- and low-water price targets are completely missing this key catalyst
While Feinseth and Goldberg both make compelling cases, their arguments -- along with the dozens of other analysts and institutions that have placed a price target on shares of Nvidia stock -- completely overlook a historical catalyst associated with next-big-thing trends and innovations.
Though the internet proved to be a game-changing technology, it wasn't a universal winner from the get-go. It took years for businesses to figure out how to optimize their marketing and sales to consumers and other businesses. In other words, it took time for the internet to mature as a mainstream innovation.
Since the advent of the internet, we've witnessed a number of other high-profile trends, technologies, and innovations come along that have also endured an early stage bubble-bursting event. This includes (but isn't limited to) genome decoding, business-to-business commerce, nanotechnology, 3D printing, cannabis, blockchain technology, and the metaverse.
For more than 30 years, investors have consistently overestimated the timeline to mainstream adoption and/or utility for game-changing innovations. In short, investors aren't giving these hyped trends the proper time or channels to mature.
Although Nvidia's sales have skyrocketed from $27 billion to more than $130 billion between fiscal 2023 and fiscal 2025 (its fiscal year ends in late January), most businesses are nowhere close to optimizing their AI solutions as of yet, or even generating a positive return on their AI infrastructure investments. This points to the growing likelihood of an AI bubble forming and, at some point, bursting.
To be objective, this doesn't mean Nvidia won't be a long-term winner. The proliferation of the internet eventually sent the stock market soaring. While Feinseth's price target may not be achievable in the near-term, it's certainly within the realm of possibilities as businesses learn how to properly utilize AI solutions and generate a profit from their aggressive AI investments.
But this historical correlation between next-big-thing trends and bubble-bursting events also suggests Goldberg is likelier to be right in the coming quarters -- albeit not for the reasons put forth in his research note in late April.
