Nvidia could become a nearly $5 trillion company. Here's how.

Barclays analysts raised their price target for Nvidia to $200, implying a $4.9 trillion market capitalization, citing optimism about the Blackwell AI platform ramp-up and its potential for earnings growth in the second half of the year. Supply chain analysis indicates healthy utilization of Blackwell, with expectations of increased capacity and sequential compute revenue growth in the coming quarters, despite near-zero sales to China. The rollout of Blackwell Ultra chips is on track, expected to contribute to improved gross margins in the latter half of the year.

Analysis

Barclays has significantly increased its price target for Nvidia Corp. (NVDA) to $200, implying a potential market capitalization of $4.9 trillion, which represents a 38% upside from its current valuation of approximately $3.5 trillion. This upgraded outlook is underpinned by strong optimism regarding the ramp-up of Nvidia's Blackwell artificial intelligence platform and its substantial earnings potential, particularly for the second half of the year, leading Barclays to identify NVDA as having the "most potential upside in our coverage." Supply chain assessments reveal "healthy" utilization of the Blackwell platform, with positive sentiment extending into the second half of 2025, aligning with the expanding use of agentic AI. Although current Blackwell capacity in June was noted at around 30,000 wafers per month, a 30% increase from the previous quarter, faster-than-anticipated utilization is reportedly compensating for this, supporting confidence for the October quarter. Consequently, Barclays projects mid-teens sequential growth in Nvidia's compute revenue for the October and January quarters, with sales to China and of the older Hopper chip generation expected to contribute "effectively zero" to this growth. The rollout of the next-generation Blackwell Ultra chips is progressing as planned, with small volumes anticipated by the end of the current quarter and mass production set for the third quarter. This transition, along with higher Blackwell shipment volumes, is expected to bolster Nvidia's gross margins in the latter half of the year. This is a critical development, considering the adjusted gross margin of 61% reported for the fiscal first quarter, a decline from 78.9% year-over-year (or 71.3% excluding a $4.5 billion charge related to U.S. restrictions on chip sales to China). Jefferies analysts echo this sentiment, forecasting that the Blackwell ramp-up will help improve gross margins from the low-70% range towards the targeted mid-70% range.

Key Decisions for Investors

• Investors should closely monitor Nvidia's Blackwell platform production scaling and utilization rates, as these are critical drivers for achieving the projected revenue growth and the $200 price target.
• Consider the anticipated gross margin expansion in the second half of the year, fueled by the Blackwell and Blackwell Ultra rollouts, as a key indicator of Nvidia's improving profitability.
• Given the strong analyst optimism and significant upside projected, particularly with the Blackwell platform, investors may find the outlook supportive, while noting that future growth heavily relies on these new products and is expected to exclude contributions from China sales and older Hopper chips.