Nvidia Stock Nears $6 Trillion on AI Demand Surge
Nvidia (NVDA) reached a new record high on Monday, with shares closing at $238.90 after briefly touching $240.10 during the session. The company's market capitalization now stands at $5.76 trillion, just $230 billion shy of the $6 trillion mark. To hit that milestone, Nvidia's stock would need to rise another 4% to approximately $248.45, assuming no change in its outstanding share count of 24.15 billion. Year-to-date, the stock has surged 28%, making it a significant driver of broader market indices like the Nasdaq Composite.
Strong demand for AI infrastructure continues to fuel Nvidia's growth. Foxconn, the company's largest server manufacturer, reported a 47% revenue increase in the third quarter, driven largely by AI demand. Nvidia's own revenue rose 106% to $96.2 billion, with data-center sales accounting for 92% of the total. The company's recent $150 billion buyback authorization, adding to its existing $235 billion program, also supports shareholder returns by reducing the share count.
Despite its impressive valuation, Nvidia trades at around 20 times forecast earnings, reflecting expectations of strong profit growth. The next test will be whether earnings can keep pace with its growing market value. Management's guidance for the next quarter projects $108 billion in revenue, with gross margins around 74%, assuming no data-center compute revenue from China. Chart-wise, $240.10 is the immediate high, with the $6 trillion milestone requiring a sustained move beyond that level.