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Nvidia (NVDA, Financial) Since the AI boom started mid 2022, NVDA) has been on an unprecedented climb with the share price up 888% to close in on $140 and its market cap up nearly $3 trillion. But as 2025 creeps closer, doubts about Nvidia's ability to maintain this pace of growth and fear of an AI sparked bubble are weighing in.
But recent analyst forecasts predict Nvidia could reach $200 per share in 2025, but it's not a guarantee. Cantor Fitzgerald and Truist rank among the four most notable ratings for December, forecasting price targets of $200 and $204, respectively. Others, more conservative upgrades came in from Daiwa Securities, which increased its target from $125 to $160 and Morgan Stanley, which increased its target from $166 to $168.
Nvidia's future is heavily dependent on both geopolitical risks and economic uncertainties. Headwinds come in the form of heightened inflation concerns and supply chain disruptions from U.S.-China tensions. But analysts also say Nvidia's growth could be capped by a broader slowing of the economy in 2025 as well as concerns over a bubble on the market.
Nvidia would need its market cap to climb to $4 trillion for its shares to trade at $164 to hit $200, and for its market cap to keep climbing from that point. Although Nvidia's AI dominance and strong fundamentals make this plausible, obstacles exist that get in the way of such ambitious goals.
As the semiconductor giant faces a critical year, investors remain divided: Is there a strong chance that Nvidia's growth story is just starting, or perhaps expectations for 2025 are far too high? Time will only tell if $200 is a milestone or a mirage.
This article first appeared on GuruFocus.