NVIDIA on Track to Become the First $4 Trillion Company: A Thorough Analysis of AI Demand, Growth Drivers, and Competitive Risks

As of June 27, 2025, the U.S. semiconductor giant NVIDIA has reached a market capitalization of $3.85 trillion (approximately 518 trillion yen), bringing the $4 trillion milestone into view. Experts have been debating the possibility of NVIDIA becoming the first company to reach a $4 trillion market cap, highlighting growth drivers, potential risks, and the competitive landscape. Based on these discussions, this article organizes the background behind NVIDIA's rapid market cap surge and provides an easy-to-understand outlook for the future.

1. NVIDIA's $4 Trillion Achievement Scenario

1-1. Current Market Cap and Required Stock Price

• Current Status: As of June 27, the stock price is approximately $157, with a market cap of about $3.83 trillion.

• Benchmark for $4 Trillion: An increase to approximately $164 per share is required. "If it reaches this amount, it will be the first $4 trillion company in history" (Ed Ludlow / Bloomberg Tech).

• Timeframe: In the short term, "it requires an increase of about 6% in trading this weekend" (ibid.), but it has risen 60% since the temporary low following the April 'DeepSeek' announcement, steadily building value as a medium- to long-term story.

1-2. Multiple Factors Supporting Growth Potential

1. Aggressive Investment by Cloud Companies
   "Cloud computing companies continue to show commitment to purchasing large quantities of NVIDIA GPUs. Demand for inference, in particular, is growing significantly" (Mandeep Singh / Bloomberg Intelligence).

2. Expansion of High-Performance Memory Product (HBM) Sales
   Memory company Micron stated that "HBM (High Bandwidth Memory) sales are expanding more than expected." This also has a positive impact on NVIDIA's product line.

3. Advancement of AI Models
   In particular, with the increasing complexity of OpenAI models, the demand for compute during inference has increased dramatically. "The trend of spending more compute on inference is supporting the enthusiasm for NVIDIA" (ibid.).

2. Growth Outlook and Market Consensus

2-1. Revenue Forecasts for 2025 and 2026

• 2025 Outlook: $200 billion in revenue. "There is a clear prospect of achieving this" (Singh).

• 2026 Consensus: Approximately $250 billion expected. This is mainly due to government customers (such as sovereign wealth funds) and strengthened expansion into Europe.

2-2. Factors for Multiple Expansion

• Increase in government procurement and data center investment by major customers

• Elimination of undervaluation and valuation based on a '40x P/E ratio assuming sustained high growth'

• Perspective: "Even excluding revenue from China, the outlook for continued growth next year is strong, which can justify multiple expansion" (ibid.).

3. Potential Risks and Competitive Environment

3-1. Trends in Custom Silicon Development

• Hyperscalers (Amazon, Google, etc.) are currently developing their own custom chips.

• Risk: If the shift toward in-house designed silicon becomes large-scale, it could place certain constraints on NVIDIA's market dominance.

3-2. Latecomers such as AMD and Broadcom

• AMD: Full-scale entry into the AI chip sector is expected, drawing attention as a "challenge to the monopoly."

• Broadcom Compatibility: NVIDIA is opening up its ecosystem and strengthening compatibility with Broadcom products. "Opening the platform is a wise move, allowing investee companies' spending to also support other companies' chips" (Shin).

4. Future Outlook and Investor Perspective

4-1. Correlation with the Macro Environment

• Progress in US-China Trade Relaxation: It has been reported that the US and China have reached an agreement on the resumption of rare earth exports. Stability in the semiconductor supply chain also benefits NVIDIA.

• Interest Rates and Monetary Policy: A slightly more accommodative stance from the Fed has been confirmed, raising expectations for lower financing costs and a tailwind for tech stocks.

4-2. Long-term Investment Decision Points

1. Sustainability of AI Demand: As long as model sophistication continues, GPU demand is likely to expand.

2. Monitoring the Competitive Landscape: Progress of AMD and the shift toward in-house chips.

3. Valuation Appropriateness: Will the earnings growth that supports the high-level valuation of a "40x P/E ratio" continue?

Whether NVIDIA reaches a $4 trillion market capitalization is not just a stock price milestone, but proof of the company's "market power" and "growth sustainability" in the AI era. While growth drivers are diverse, including continuous investment by cloud companies, the expansion of inference demand, and government procurement, the trends in custom silicon and latecomers remain risk factors. Investors are required to carefully assess the balance between earnings growth and valuation while keeping a close eye on the macro environment and competitive trends among tech companies.

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