Only a handful of U.S. companies currently have a market value exceeding $1 trillion. They are listed below in descending order based on the upside (or downside) implied by the median 12-month target price set by Wall Street analysts.
Wall Street analysts collectively see Nvidia as the best trillion-dollar stock to buy as of April 12. The 58% upside implied by the median target price exceeds that of the next closest stock (Amazon) by 14 percentage points. Here's what investors need to know about Nvidia.
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Nvidia is best known for its invention of the graphics processing unit (GPU). Those chips first revolutionized computer graphics, but they have more recently become the industry standard in accelerating complex data center workloads like artificial intelligence (AI). Nvidia has more than 90% market share in data center GPUs and more than 80% in AI accelerators.
However, the company is truly difficult to compete with because it supplements its GPUs with an unparalleled software development platform called CUDA, which spans hundreds of code libraries, pretrained models, and frameworks that streamline AI application development across use cases that range from recommender systems to generative AI tools.
Additionally, Nvidia supplements its GPUs with adjacent data center hardware like central processing units (CPUs), chip interconnects, and networking equipment. In fact, Nvidia is the market leader in InfiniBand networking, the most popular connectivity solution for AI. That vertical integration lets Nvidia design data center systems with a superior total cost of ownership, according to CEO Jensen Huang.
Nvidia has been battling two material headwinds in recent months, but neither should derail the company in the long run. First, when Chinese start-up DeepSeek trained sophisticated large language models with much less computing power than U.S. companies, the market assumed Nvidia's sales would suffer as investments in AI infrastructure slowed. But that has not happened.
Instead, many analysts think more cost-efficient training techniques will increase the demand for Nvidia GPUs by making AI affordable for more companies. Additionally, the emergence of robotics and reasoning models (large language models for complex reasoning) means AI will require 100 times more computing power than anticipated only a year ago, according to CEO Jensen Huang.
The second headwind Nvidia is battling is the chip export restrictions imposed by the U.S. government. But investors recently got some good news on that front. While Nvidia cannot sell its most powerful GPUs in China, the Trump administration has reportedly chosen not to ban the less powerful H20 processors despite the burgeoning trade war, according to NPR.
Image source: Getty Images.
Generative AI is only the most recent chapter in a longer book. In his keynote speech at the Computex 2024 event, Jensen Huang said, "The next wave of AI is here. Robotics powered by physical AI will revolutionize industries." Through hardware and software innovation, Nvidia is positioning itself to be a big winner as autonomous machines become more prevalent.
Nvidia Isaac is a robotics development platform that lets engineers build applications for industrial manipulation arms, autonomous mobile robots, and humanoid robots. Additionally, Nvidia recently introduced Isaac GR00T, a customizable model for humanoid reasoning and skills. GR00T will accelerate the design of autonomous humanoids, a market Citigroup says may be worth $1 trillion by 2040.
Looking ahead, Grand View Research estimates that spending across AI hardware, software, and services will increase by 35% annually through 2030. Meanwhile, Wall Street expects Nvidia's earnings to increase by 38% annually through fiscal 2027, which ends in January. That makes the current valuation of 37 times earnings look cheap. Patient investors willing to hold the stock for at least three years should feel comfortable buying a position today.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Citigroup is an advertising partner of Motley Fool Money. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, 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.