Nvidia breakout puts $4 trillion market value within reach

Chesnot/Getty ImagesTwo years after Nvidia Corp

After the emergence of China’s DeepSeek sent the stock plunging earlier this year and stoked concerns that outlays on artificial intelligence infrastructure were set to slow, Nvidia s have rallied back to a record

Its biggest customers remain full steam ahead on spending, much of which is flowing to its computing systems

With a broadening customer base clamoring for Nvidia’s AI accelerators and competitors still distant, bulls are betting the chipmaker’s s have plenty of room to run. “We believe that Nvidia is truly uniquely positioned, and that it will sustain its position over the next decade-plus,” said Aziz Hamzaogullari, chief investment officer at Loomis, Sayles & Co

And founder of the firm’s growth equity strategies team

Hamzaogullari isn’t alone

The bullish sentiment behind Nvidia and other makers of AI gear is a stark reversal from earlier in the year when the emergence of advanced chatbots DeepSeek, developed relatively cheaply in China, sparked fears that Nvidia’s customers would cut spending

Are jected to put $350 billion into capital expenditures in their upcoming fiscal years, up from $310 billion in the current year, according to the average of analyst estimates compiled by Bloomberg

Of course, there are still plenty of risks that could derail Nvidia’s rally

The company relies on Taiwan Semiconductor Manufacturing Co

For the duction of its chips, exposing Nvidia to US President Donald Trump’s trade policies, which can change on a whim

Trump’s 90-day pause on the stiffest tariffs is set to end on July 9

At the same time, there’s no guarantee Nvidia’s biggest customers won’t change their tune on spending in coming years

Many of them are their own chips to avoid the steep prices commanded by Nvidia. “The valuation depends on the persistence of growth, and we already know that Nvidia’s largest customers are trying to figure out ways to be more efficient with their spending, not just with Nvidia, but also offloading to their own silicon,” said Dan Davidowitz, chief investment officer at Polen Capital Management. “You have to have very robust assumptions to get comfortable with the valuation, and we just don’t have a good enough view on what that demand looks . ” Nvidia s are priced at 32 times earnings jected over the next 12 months, compared with 22 times for the S&P 500

The stock’s valuation doesn’t bother Loomis Sayles’s Hamzaogullari, who remains a firm believer that AI will transform society and is convinced that Nvidia will remain a key winner as ductivity gains from the nology expand. “That doesn’t mean it will be steady Eddie all the time, that there won’t be disruptions in spending, but this is a secular structural change, and Nvidia remains one of the biggest beneficiaries,” Hamzaogullari said. “The stock still looks attractive given that backdrop. ”Introducing the 2025 Fortune 500, the definitive ranking of the biggest companies in America

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