Several analysts have raised their targets on Nvidia. Its valuation could approach $5 trillion

Analysts at Barclays have raised their target price for shares of AI chip market leader Nvidia, expecting them to rise 38% over a 12-month horizon. And Melius Research target suggests growth of quotations by 41%. If those expectations are met, the AI chip maker's capitalization will approach $5 trillion within a year, MarketWatch notes.

Barclays analyst Tom O'Malley reiterated a buy recommendation on Nvidia shares (Overweight rating) and raised his target price from $170 to $200 - implying a potential upside of 38% from Tuesday's close.  At that valuation, the chipmaker's capitalization would reach $4.9 trillion versus the current roughly $3.5 trillion, calculated by MarketWatch.

Barclays has named Nvidia as the stock with the "highest growth potential" in the second half of the year among all the companies it tracks. The bank's analyst explained that its securities will rise thanks to the expansion of the top line of Blackwell processors. According to his assessment, the use of these chips in the supply chain looks "healthy" and Nvidia's manufacturing partners are "positively bullish" for the second half of 2025. Additional demand for computing has created so-called agent-based AI - systems that can perform tasks with minimal human involvement, MarketWatch writes.

Barclays forecasts that in the third and fourth fiscal quarters, Nvidia's revenue from chip sales will grow by 13-17%. This is despite the fact that exports to China, which the U.S. administration has restricted, as well as shipments of previous-generation Hopper chips, according to the analyst, will "virtually disappear" from the revenue structure.

According to Barclays, the release of the new Blackwell Ultra processors is on schedule: small volumes will appear in the supply chain by the end of the current quarter, and mass production will begin in the third quarter. The growth in Ultra sales and increased Blackwell production will help Nvidia improve its gross margin in the second half of the year, the analyst said.

On June 17, Melius Research analyst Ben Reitzes also maintained a buy recommendation on Nvidia's securities and raised the target from $195 to from $205, suggesting an even greater upside over 41%. 

"How much share will Nvidia be able to take in a $2 trillion-plus annualized market? Why not 40% if the company becomes an infrastructure company?" - Reitzes wrote in a note that quotes Barron's. The analyst was commenting on a forecast by chipmaker CEO Jensen Huang he said that annual spending on AI-enabled data centers would double to $2 trillion over the next four to five years.

Reitzes estimates that under such conditions, the company's revenue in the data center segment could reach about $800 billion. By comparison, Wall Street estimates it will be just under $180 billion in the current fiscal year. The Melius analyst suggests that a realistic forecast is $275 billion in fiscal 2028, but stresses that the company's prospects remain undervalued.

According to Melius, Nvidia is poised to capitalize on the rapid growth of so-called "sovereign AI" - local data centers that governments are building to handle sensitive data. Specific projects in this area already exist in Saudi Arabia, the UAE and Europe.

Nvidia shares fell 0.4% to $144.1 in Tuesday trading. That's just 6% below their peak value reached on January 6. Since the beginning of the year, the stock has appreciated by more than 7%, with the company's capitalization rising by almost 25% over the past three months.

According to data from MarketWatch, 60 of 67 analysts tracking the chipmaker's securities recommend buying them, six recommend holding, and only one analyst advises selling. The Wall Street consensus price target is $172.2, up 19.5% from the close of trading on June 17.