Nvidia Corp. has redefined what's possible for a publicly traded company. With a market capitalization hovering around $4.6 trillion—making it the world's most valuable company—Wall Street is making the case that the AI chipmaker's trajectory still points decidedly upward.

Analysts have slapped a "Strong Buy" rating on Nvidia, with a mean price target of $256 implying 36.1% upside from current levels. If that target is achieved, Nvidia would firmly establish itself as the first company to sustain a $5 trillion valuation—a milestone it briefly touched in 2025 before pulling back.

The Numbers Behind the Enthusiasm

Nvidia's recent financial performance explains why 48 analysts remain bullish despite the stock's meteoric rise:

For the third quarter of 2026 (Nvidia's fiscal year runs ahead of calendar), the company reported revenue growth of 62% year-over-year to $57 billion. Operating cash flows for the first nine months were a staggering $66.5 billion, providing ample flexibility for continued investment in research and development, capacity expansion, and shareholder returns.

These aren't the numbers of a company running out of runway. If anything, they suggest acceleration.

Locked-In Demand From AI Leaders

Two recently signed contracts underscore Nvidia's entrenched position at the center of the AI revolution:

  • OpenAI: A multibillion-dollar contract worth $38 billion extends through 2026 and beyond, ensuring the ChatGPT creator remains deeply dependent on Nvidia's GPU architecture.
  • Anthropic: A $30 billion agreement locks in another AI leader, the company behind Claude, as a long-term Nvidia customer.

Combined, these two contracts alone represent $68 billion in committed revenue—and they're just two customers among hundreds of enterprises racing to build AI capabilities.

"The recently signed multibillion-dollar contracts of $38 billion with OpenAI and $30 billion with Anthropic are crucial examples of reliance on Nvidia. These contracts exceed 2026 and will ensure Nvidia is strategically placed at the heart of global AI build-ups."

— Wall Street research note

The Hyperscaler Spending Boom

Nvidia's prospects are inextricably linked to the infrastructure buildout by AI hyperscalers—and that spending shows no signs of abating. Projections suggest hyperscalers will spend half a trillion dollars on infrastructure in 2026, with accelerated investments in data center services creating a sustained tailwind for chip manufacturers.

The global AI market is projected to hit $4.8 trillion by 2033, with the AI Agents market expected to grow at a compound annual growth rate of 43.3% through 2030. Nvidia's products sit at the foundation of this entire ecosystem.

Competition Remains Distant

Despite years of attempts by AMD, Intel, and various startups to challenge Nvidia's dominance in AI accelerators, the company maintains approximately 80% market share in data center GPUs. Its CUDA software ecosystem creates significant switching costs, and its pace of innovation—introducing new chip architectures roughly every two years—makes it difficult for competitors to catch up.

The company's recent Rubin architecture announcement at CES 2026 demonstrated continued technological leadership, though it also sparked a debate among analysts about whether the upgrade cycle could temporarily slow demand for current-generation products.

Risks to the Thesis

At a $4.6 trillion valuation, Nvidia is priced for perfection. Several risks could derail the path to $5 trillion:

Execution Risk: Any stumble in product launches, supply chain disruptions, or yield issues could spook investors accustomed to flawless execution.

Competitive Threats: While current competition is weak, well-funded challengers including AMD, Google's TPU program, and custom silicon from major cloud providers continue investing heavily.

Valuation Compression: If AI spending growth slows or the Fed keeps rates higher for longer than expected, multiple compression could offset earnings growth.

Regulatory Scrutiny: Nvidia's market dominance could attract antitrust attention, particularly given ongoing scrutiny of Big Tech across multiple jurisdictions.

What the Bears Miss

Critics have been calling Nvidia overvalued since the stock was trading at a fraction of current levels. What they consistently underestimate is the size of the opportunity: AI is not a fad or a bubble but a fundamental technological shift comparable to the internet or mobile computing.

Nvidia isn't just selling chips—it's selling the infrastructure for the next generation of computing. And in that context, even a $5 trillion valuation might eventually look like a bargain.

The Bottom Line

Nvidia's path to $5 trillion isn't guaranteed, but the fundamental case remains compelling. With locked-in demand from AI leaders, accelerating infrastructure spending, and a competitive moat that continues to widen, the company is positioned to capitalize on one of the largest technological transformations in history.

For investors, the question isn't whether AI will continue to grow—it will. The question is whether Nvidia can maintain its dominance and execute at the level investors have come to expect. So far, there's little evidence to suggest it won't.