NVIDIA Corporation (NASDAQ: NVDA) has achieved a milestone that no chip company has ever reached before.

NVIDIA stock (NVDA) just hit $209.16, jumping nearly 5% in a single session, and pushing its market value past an astonishing $5 trillion. That number alone explains the moment. The AI boom is no longer a story. It is now the market’s core engine. And Nvidia stock sits right at the center of it, News.Az reports, citing The Economic Times.

In simple terms, NVIDIA stock (NVDA) is rising because demand for AI chips is exploding faster than supply. Data centers, cloud giants, and governments are buying at scale. The company’s latest revenue already crossed $215.9 billion, with profits above $120 billion, both industry-leading figures. Investors are not just reacting to results. They are pricing in what comes next—massive AI infrastructure spending through 2027 and beyond.

The rally is not happening in isolation. The entire semiconductor space is heating up. Advanced Micro Devices (AMD) jumped over 13%, while Intel Corporation (INTC) surged more than 23% after strong earnings and government backing. Still, NVIDIA stock continues to dominate the narrative. It is not just another chipmaker anymore. It is the backbone of the AI economy.

So the real question now is simple. After this massive rally, is NVIDIA stock still a buy—or is the market getting ahead of itself?

What is driving NVIDIA stock (NVDA) higher today amid the AI boom?

The biggest driver behind NVIDIA stock (NVDA) is clear. AI demand is accelerating at a pace few expected. Every major tech company is building AI infrastructure. And Nvidia supplies the most advanced GPUs powering it.

The company’s Blackwell and B300 chips are now at the center of this demand cycle. These chips are not just upgrades. They are foundational for next-generation AI systems. Cloud providers, including those building large language models, are placing massive orders. That creates visibility in revenue. And markets reward visibility.

Partnerships are also playing a key role. Nvidia’s collaboration with Google on advanced AI systems and its work with nuclear energy startup Oklo Inc. show how serious the infrastructure race has become. AI needs power. Lots of it. Nvidia is positioning itself not just as a chip provider, but as a full-stack AI infrastructure company.

Meanwhile, industry forecasts are turning more aggressive. Research firms now expect the semiconductor market to expand sharply through 2026, driven mainly by data center demand. That reinforces confidence in NVIDIA stock’s long-term trajectory.

Why are analysts so bullish on NVIDIA stock (NVDA) through 2027?

Wall Street is not holding back. Analysts continue to rate NVIDIA stock (NVDA) as a strong buy. The average price target is now around $264, with some estimates going above $430.

The reason is simple. Growth is not slowing. In fact, it may accelerate.

Data center revenue is expected to compound rapidly over the next few years. Some projections even suggest Nvidia could approach $1 trillion in annual revenue before the decade ends. That sounds extreme. But then again, so did a $5 trillion valuation just a few years ago.

Another key factor is margins. Nvidia is not just growing fast. It is growing profitably. Its AI chips command premium pricing. And with limited competition at the high end, pricing power remains strong.

Institutional investors are also increasing exposure. Large funds are adding to NVIDIA stock positions, signaling confidence in long-term earnings growth. When institutions move together, markets tend to follow.

How does NVIDIA stock (NVDA) compare with AMD, Intel, and the broader AI rally?

The AI rally is broad. But not all players are equal. AMD is gaining momentum, especially in data center GPUs. Its recent 13% surge shows growing investor confidence. However, it still trails Nvidia in ecosystem strength and software integration.

Intel, on the other hand, is making a comeback. Backed by nearly $20 billion in U.S. government support, it is positioning itself as a domestic manufacturing leader. Its strong earnings outlook has pushed the stock sharply higher. That introduces real competition over time.

Other players like Taiwan Semiconductor Manufacturing Company (TSM) and Arm Holdings (ARM) are also benefiting from the AI wave. Even Qualcomm (QCOM) is joining the rally.

But here’s the difference. NVIDIA stock is not just participating in the AI boom. It is leading it.

The company controls the most critical layer of AI infrastructure. Its CUDA software ecosystem creates a moat that competitors struggle to cross. That is why investors continue to favor NVIDIA stock over others, despite rising competition.

Is NVIDIA stock (NVDA) overvalued or still a strong long-term investment?

This is where things get more nuanced. On valuation, NVIDIA stock is expensive. It trades at roughly 40 times forward earnings and about 23 times revenue. Those numbers are high by traditional standards. And they leave little room for error.

There are also real risks. Competition is intensifying. Big customers like Google, Meta, and others are developing their own AI chips. That could reduce Nvidia’s dominance over time.

Geopolitical risks are rising too. U.S. export restrictions are already impacting Nvidia’s access to China. In fact, recent guidance assumes zero data center revenue from that region. That is a major shift.

There is also legal uncertainty. A class-action lawsuit related to past crypto mining disclosures could result in financial penalties.

News.Az 

By Ulviyya Salmanli