AI. AI. AI.
Nvidia reclaims world’s most valuable company spot, investors eye $4 trillion milestone https://t.co/9uhVYbK96W
— Benjamin Dada (@DadaBen_) June 27, 2025
Nvidia’s market cap has surged from $360 billion at the end of 2022 to an all-time high of $3.76 trillion as of June 25, 2025. Analyst John Donovan believes the company is on its way to a greater than $6 trillion valuation. He lifted his price target for Nvidia from $175 per share to $250.
Donovan sees Nvidia’s dominance in AI-accelerated data centers building.
Nvidia Just Became The World's Most Valuable Stock; Is It Time For A Semiconductor ETF Rethink?https://t.co/66fYR1aRnB
— Benzinga (@Benzinga) June 28, 2025
He pointed to Nvidia shipping an estimated 6.5 million GPUs this year and 7.5 million next year, with average selling prices for these GPUs topping $40,000. Nvidia has enjoyed a 100% to 300% pricing premium over its AI-GPU direct rivals.
However, there are some tangible headwinds Donovan appears to be overlooking. The biggest issue for Nvidia is the maturation of AI technology. Every game-changing technology and innovation needs ample time to mature.
🏅 Our new AI models and datasets put NVIDIA in a top spot on the @HuggingFace heatmap ➡️ https://t.co/LGD1IOs44y
We’ve significantly scaled our efforts to empower developers to build more sophisticated #AI systems by bringing our AI software and expertise to the community.… pic.twitter.com/xxUg5AnDLB
— NVIDIA AI Developer (@NVIDIAAIDev) June 27, 2025
Nvidia faces competition and valuation challenges
The early adoption rate and utility of AI technology are still questionable. Nvidia also faces growing competitive pressure.
With Taiwan Semiconductor Manufacturing ramping up its chip-on-wafer-on-substrate capacity and Advanced Micro Devices increasing its production of Instinct series AI-accelerating chips, direct competition is growing. Many of Nvidia’s top customers by net sales are also developing their GPUs. Although these internally developed chips may trail Nvidia’s Hopper and Blackwell in terms of compute potential, they are notably cheaper and more readily accessible, which could delay future upgrade cycles and pressure Nvidia’s gross margin.
Lastly, there’s the issue of Nvidia’s high valuation relative to its trailing-12-month sales. Historically, megacap companies on the leading edge of a technological trend have topped out at price-to-sales ratios of roughly 30 to 43. Nvidia’s current multiple of almost 26 indicates that its valuation remains significantly high compared to other market-leading stocks.
Despite these challenges, Nvidia’s potential for growth remains undeniable, making it one of the most closely watched companies on Wall Street.
