Nvidia’s (NVDA) meteoric rise continues, with shares surging more than 80% from their April lows to reclaim the title of the world’s most valuable company, boasting a $3.85 trillion market capitalization. The AI chipmaker has posted six consecutive days of gains, setting a new record high above $158.
The resilience of NVDA stock is remarkable considering Nvidia faces an effective lockout from China’s $50 billion semiconductor market. New rules under President Donald Trump have blocked sales of Nvidia’s H20 processors, forcing the company to write off $4.5 billion in inventory and forfeit $8 billion in potential sales. CEO Jensen Huang acknowledged the China market is “effectively closed to U.S. industry.”
However, Nvidia’s dominance in AI infrastructure remains unchallenged. The company reported 69% year-over-year revenue growth in May, driven by a 73% surge in its data center business. Analysts project 53% revenue growth to nearly $200 billion for fiscal 2026.
Wedbush’s Dan Ives predicts Nvidia will join the $4 trillion club this summer and reach $5 trillion within 18 months. Beyond AI, Huang highlighted robotics as the next major opportunity, envisioning billions of robots powered by Nvidia technology.
While geopolitical risks persist, Nvidia’s technological moat and expanding addressable markets suggest the rally has fundamental support at current levels.
Nvidia is capitalizing on an emerging wave of sovereign AI investments as countries worldwide rush to build domestic artificial intelligence capabilities, signaling a new phase of growth beyond traditional hyperscaler customers.
The chip giant is experiencing unprecedented demand from governments and regional cloud providers seeking to establish AI sovereignty, with executives highlighting tens of billions of dollars in near-term opportunities that could reach $1 trillion over several years. This represents a fundamental shift from the concentrated AI infrastructure buildouts of the past two years.
Countries across Europe, the Middle East, and Asia are prioritizing local AI infrastructure to maintain control over their data and develop models trained on native languages and cultural contexts. Nvidia recently announced partnerships in the United Kingdom, Germany, and France, following commitments in the Middle East.
The emergence of reasoning models, such as DeepSeek, has fundamentally changed AI computing requirements. These models generate more tokens during inference as they “think through” problems, creating up to 20 times more market opportunity for GPU compute. This shift benefits Nvidia’s latest Blackwell architecture, which was specifically engineered for inference workloads.
Nvidia’s integrated approach, combining GPUs, networking, and software, continues to differentiate the chip maker as AI workloads become more complex. The transition from individual server deployments to full rack-scale systems has created new supply chain dynamics that position Nvidia for higher-value sales.
With approximately 100 AI factories currently under construction globally, Nvidia is positioning itself as the platform of choice for both training and inference. Its networking business reached $5 billion in recent quarters, with its Spectrum-X Ethernet solution gaining traction alongside traditional InfiniBand offerings.
As the AI market matures, Nvidia’s ability to support diverse workloads across its ecosystem appears increasingly valuable compared to specialized ASIC solutions optimized for specific use cases.
Nvidia stock has returned 28% to shareholders in the last 12 months and has surged a staggering 31,000% in the last decade. Out of the 44 analysts covering NVDA stock, 37 recommend “Strong Buy,” three recommend “Moderate Buy,” three recommend “Hold,” and one recommends “Strong Sell.”
The 12-month average target price for NVDA stock is just below $177, 12% above the current price.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com