Nvidia Edges Closer to $6 Trillion Milestone
Nvidia's stock hit a record close of $238.90 on October 5, bringing its market capitalization to approximately $5.8 trillion, just 4% shy of the unprecedented $6 trillion mark. The milestone, while significant, offers little insight into the stock's future performance, as historical data shows mixed outcomes for companies reaching new trillion-dollar thresholds.
Apple's journey provides a cautionary tale. After hitting $1 trillion in 2018, its stock dropped 2% over the next year, while crossing $2 trillion in 2020 led to a 27% gain, still lagging behind the S&P 500's 31% return. The most dramatic shift came after Apple reached $3 trillion in 2022, with shares plummeting 31% over the following year.
Nvidia's milestones have been more favorable so far. Following its $4 trillion mark in 2025, shares rose 25% in the subsequent year, and after hitting $5 trillion in 2025, the stock gained about 15% in 11 months. However, the company's earnings growth outpaced stock performance, with non-GAAP earnings per share climbing 120% year over year in its latest quarter.
The future of Nvidia's stock hinges on its earnings trajectory. Management forecasts revenue of around $108 billion for the fiscal third quarter, nearly 90% higher than the same period last year. Investors are paying about 15 times expected earnings for fiscal 2028, a valuation considered low given the company's rapid earnings growth. However, risks remain, particularly if AI-related spending slows down.