Nvidia (NVDA 3.28%) has impressed investors with a string of accomplishments: from double- and triple-digit revenue increases to reaching record revenue levels to soaring stock performance. This is thanks to the company's dominance in a market growing by leaps and bounds toward the trillion-dollar mark: artificial intelligence (AI). Nvidia is the global leader in AI chips, but the company also has constructed an entire portfolio of products and services to ensure its ability to sell to customers throughout their AI journey.
The AI giant continues to innovate, too, promising to update its chips on an annual basis. Nvidia has proven it can follow through on this pledge by releasing its Blackwell architecture and chip this past winter and recently beginning the rollout of the next chip, Blackwell Ultra.
So, Nvidia is an expert when it comes to meeting milestones and reaching records. My prediction is Nvidia will keep this momentum going by doing something no other company has done, and it will do it this summer.
Image source: Getty Images.
Nvidia's big advantage
Before diving in, I'll start with a quick summary of Nvidia's moves along the path to AI dominance. The company, originally known for selling its chips -- graphics processing units (GPUs) -- to the video gaming market, expanded into other markets over the years and as soon as the AI opportunity arose, Nvidia took the leap. This first-to-market advantage is a key element in Nvidia's success story as it gave the company the chance to build a solid reputation with customers and keep its innovation ahead of rivals.
This translated into explosive growth, with revenue skyrocketing in recent years thanks to demand for the most-powerful AI chips. Customers aim to build top-performing AI models fast, and for that they need the best compute around. Today's tech giants, from Microsoft to Meta Platforms, haven't hesitated about flocking to Nvidia.
NVDA Revenue (Annual) data by YCharts
As mentioned above, the chip powerhouse has added significantly to its range of offerings in order to serve every type of AI customer, every step of the way. Nvidia even makes specific platforms to help particular industries meet their AI goals. For example, it's developed drug discovery systems for pharma companies aiming to apply AI to their research.
All of this has not only helped earnings rise, but it's also led the stock to advance a mind-blowing 897% over the past three years -- and this has helped Nvidia stay neck and neck with Microsoft for the title of the biggest company by market value.
NVDA Market Cap data by YCharts
The road to $4 trillion
Here's my prediction: I think Nvidia's market value will climb to $4 trillion ahead of any other company hitting that mark. And it could happen as early as this summer for the following reasons.
First of all, Nvidia, trading for 36 times forward earnings estimates, is much cheaper than it's generally been over the past year, and today's valuation looks very reasonable considering Nvidia's growth track record and its potential to keep growth going for many years.
At this valuation, investors should continue piling into Nvidia stock to get in on the company's next stages of growth, and this will push the stock price, and market cap, higher. This growth could be unfolding right now as demand for AI inferencing takes off. In the most recent quarter, Nvidia said it saw a jump in demand.
Second, Nvidia also could benefit from potential positive news regarding import tariffs. President Donald Trump's plan temporarily exempted electronics from import duties, but these products may eventually be subject to a tariff level that differs from the one applied to other products. There's reason to believe that this delay in setting a tariff suggests the government is aiming for a level that will be manageable for U.S. tech companies. So, any announcement that's better than expected or an exemption that remains ongoing could support Nvidia stock, and tech stocks in general.
NASDAQ: NVDA
Key Data Points
These two elements could drive Nvidia stock higher this summer. And finally, it's important to keep in mind that at the stock's current price, it only needs to rise about 3.6% from Monday's close to bring its market cap up to the $4 trillion mark. Nvidia is known to gain that much in one trading session on good news, so it's clear the company could quickly make it to $4 trillion. Market cap alone is not a reason to buy a stock, but a new record is exciting and will boost investor confidence.
All of this prompts me to predict that Nvidia, even if it slips here and there in the coming days or weeks, may jump to $4 trillion at some point this summer, accomplishing something no other company has ever done.
