Nvidia will become the first $4 trillion stock in 2025

It’s the time of year to make predictions about the new year ahead. I agree with the Danish proverb: “Forecasting is difficult, especially when it comes to the future.” »

However, I’m going to go out on a limb and make a prediction about the new year. I predict that Nvidia (NASDAQ:NVDA) will become the first $4 trillion stock in 2025.

At first glance, my prediction may seem rash. Apple (NASDAQ:AAPL) is closer to reaching a $4 trillion market cap than Nvidia, and Microsoft (NASDAQ:MSFT) is not far behind Nvidia. Apple’s stock price would only need to rise about 4% to reach the threshold, while Microsoft would require a 22% gain. Nvidia shares would need to soar nearly 21%.

So why am I predicting Nvidia will hit the mark first instead of Apple or Microsoft? On the one hand, I think Apple and Microsoft stocks will tread water until both companies release their next quarterly results. The Federal Reserve’s hints at a smaller reduction in interest rates in 2025 risk dampening the momentum these two stocks have enjoyed in recent weeks.

Both Apple and Microsoft deliver their next quarterly updates before Nvidia, and positive results could propel either stock past the $4 trillion mark. This is particularly possible for Apple because its market capitalization is already very close.

However, I have a feeling that Apple’s results for the first quarter of fiscal 2025 could be disappointing. For what? First opinions on Apple’s new product Generative AI abilities have not been great. A survey conducted by SellCell.com found that 73% of iPhone users believe AI features don’t add much, if any, value.

Granted, this survey was conducted before the release of iOS 18.2 with additional Apple Intelligence features. But the general buzz I’ve seen online is that generative AI probably won’t spark a huge iPhone upgrade supercycle that some analysts were expecting – at least not yet.

I wouldn’t be surprised if Microsoft exceeds expectations with its next quarterly update. However, the overall tone of management’s comments during the latest earnings conference call makes me skeptical that the company will be able to deliver the type of results needed to be a major catalyst.

My prediction will fail if my assumptions about Apple and/or Microsoft turn out to be wrong. Let’s assume, however, that neither stock regains enough momentum to reach a market cap of $4 trillion in the near term. What will it take for Nvidia to reach $4 trillion first? I think there’s a one-word answer: Blackwell.

Blackwell is Nvidia’s latest graphics processing unit (GPU) architecture. The company claims it can run large language models (LLMs) with billions of parameters at up to 25 times lower cost and power consumption than the Hopper GPU platform. Nvidia began shipping Blackwell GPUs in the fourth quarter.

Nvidia CEO Jensen Huang said during his company’s third-quarter earnings conference call, “The demand for Blackwell is staggering.” He told CNBC in an October 2024 interview that demand for the powerful AI chip was “insane.” Maybe Huang was being too exuberant, but I think he was just stating the facts.

I anticipate investors will become increasingly excited about Blackwell’s prospects in January and in the weeks of February leading up to the company’s first-quarter update. This would reverse the current slide in Nvidia’s shares and could potentially put it close to Apple’s market cap. Better than expected first quarter results, combined with particularly optimistic second quarter sales forecasts, could easily allow Nvidia to breach the $4 trillion market, in my opinion.

Beth Kindig, an analyst at I/O Fund, recently wrote that she thinks Nvidia shares could skyrocket 70% in 2025. If she’s right, the chipmaker’s market cap would approach $5.6 trillion. dollars next year.

I’m not as bold a forecaster as Kindig. However, she may be right. If so, I suspect my prediction that Nvidia would reach $4 trillion first is more likely to come true.

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Keith Speights holds positions at Apple and Microsoft. The Motley Fool holds positions and recommends Apple, Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Prediction: Nvidia will become the first $4 trillion stock in 2025 was originally published by The Motley Fool