Key Takeaways
- Nvidia shares reached an all-time closing high of $238.90, bringing market capitalization to approximately $5.76 trillion.
- The company requires a share price above $248.96 to achieve a $6 trillion market cap, using its present share count.
- BNP Paribas analyst increased his Nvidia price target from $285 to $345, driven by AI agent expansion expectations.
- Manufacturing partner Foxconn delivered a 47% quarterly revenue increase, reflecting robust AI server market conditions.
- The chipmaker authorized a record-breaking $150 billion expansion to its share repurchase program.
Nvidia shares posted an all-time closing record of $238.90 on Monday, climbing 2% during the session. The achievement positions the semiconductor giant’s market capitalization near $5.76 trillion.
This marks the company’s first record closing price since May. The stock’s prior peak stood at $235.74.
Reaching a $6 trillion market capitalization would require Nvidia shares to climb beyond $248.96. This calculation uses the firm’s existing outstanding share count, which may fluctuate due to its active repurchase activity.
Karl Ackerman, an analyst at BNP Paribas, believes the rally has further room to run. He elevated his Nvidia price target to $345 from $285 this week.
His thesis focuses on AI agents, which he believes will generate increased demand for the company’s chip infrastructure. Ackerman forecasts that Nvidia will command more than 75% of the global AI computing market by revenue.
Factors Behind The Bullish Outlook
According to Ackerman, Nvidia’s rack-scale AI infrastructure combined with its CUDA software ecosystem creates a competitive moat that rivals struggle to replicate. He anticipates the company will sustain gross margins exceeding 70%, despite intensifying competition.
His valuation methodology applies a conservative 15x price-to-earnings multiple to his 2028 earnings projection, adjusted for the company’s cash position. This represents a measured baseline for a stock experiencing consistent appreciation.
The stock appeared in a Barron’s recommendation last May when shares traded around $226. The publication’s 12-month price target of $300 is materializing ahead of schedule.
Manufacturing ally Foxconn provided additional momentum on Monday. The Taiwanese company, officially Hon Hai Precision Industry, disclosed September-quarter revenue reaching 3.03 trillion New Taiwan dollars, equivalent to $95.48 billion.
This represents a 47% year-over-year increase. Foxconn indicated its AI operations would continue expanding through year-end, though it stopped short of issuing numerical guidance.
While Foxconn gained recognition in the United States for Apple device assembly, which declined 0% on Monday, the majority of its current business stems from cloud infrastructure and networking equipment, particularly AI servers powered by Nvidia processors.
Valuation Disconnect Persists
Notwithstanding the record share price, Nvidia currently trades near its lowest forward earnings multiple in more than ten years. This valuation appears disconnected from expectations that both revenue and net income will expand approximately 90% during the current fiscal year.
Based on Monday’s closing price, the stock carries a forward price-to-earnings ratio of 17.1x, per FactSet data referenced by Barron’s. CEO Jensen Huang has personally addressed this valuation anomaly.
During last month’s Goldman Sachs technology conference, Huang described Nvidia as “the world’s first and only growth value stock.” He characterized the company as “incredibly misunderstood.”
Goldman Sachs shares fell 1% that same day. Nvidia executed a significant capital allocation announcement last week.
The board approved a $150 billion expansion to its share buyback authorization. This elevates total remaining repurchase capacity to $235 billion, which the company claims represents the largest single increase in corporate history.
Management plans to execute the complete buyback program through fiscal 2028. The consensus price target among FactSet-tracked analysts currently stands at $334.45 per share.
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