There has been no shortage of bullish forecasts for Nvidia (NASDAQ: NVDA) stock throughout 2024, with the semiconductor giant, for example, regularly being named one of the top candidates for the first company to reach a $4 trillion market capitalization.
Considering NVDA shares’ performance – they skyrocketed 739.45% in exactly 2 years and are up 194.17% year-to-date (YTD) to their press time price of $141.70 – the prevailing optimism is hardly surprising.
One major institution, however, the Danish Saxo Bank, went where no credible analysts had gone before and estimated on December 3 that Nvidia would more than double its valuation before the end of 2025 and become the world’s first $7 trillion firm.
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Why Saxo says Nvidia might hit $7 trillion in 2025
The argument for Nvidia rocketing to $7 trillion is anchored in the age-old notion that the only ones to reliably get rich in a gold rush are the shovel sellers and that the chipmaker is the proverbial vendor in the ongoing artificial intelligence (AI) boom.
Indeed, Saxo’s Chief Macro Strategist, John J. Hardy, explained that Nvidia is uniquely positioned in the sector due to its sheer market dominance and its place at the technological cutting edge.
The strategist also added that ongoing advancements have started raising the need for ever-mightier data centers – which consume an ever-mightier amount of electricity – as they require more numerous and advanced chips to operate competitively.
With its new ‘Blackwell’ – far more powerful and efficient than the generation ahead – Nvidia is almost certain to capture much of the profits of big tech’s next step, particularly as the semiconductor giant’s CEO already described demand as ‘insane.’
Still, Hardy’s analysis had a distinctly bearish undertone.
While forecasting Nvidia will reach a valuation of $7 trillion – and that NVDA shares will be above $250 – and become twice as large as Apple (NASDAQ: AAPL) on greater and greater profit margins, he also posited markets will eventually grow tired of such a level of revenue capture, and regulators wary of such a monopolistic position.
Additionally, the implication of the scenario is that other prominent firms – including Apple – will stagnate, maybe even decline, as they have to purchase an increasing number of more advanced shovels and expend significantly more money on data center electricity.
Saxo’s other ‘outrageous’ 2025 forecasts
Finally, Nvidia’s climb to $7 trillion is not Saxo Bank’s only ‘outrageous prediction’ for 2025.
In fact, the website offers seven other similarly outlandish forecasts. For example, the Danish company estimates the Pound’s Euro discount might end as European Union (EU) economies continue facing economic headwinds.
Saxo similarly believes the U.S. dollar might not fare much better if the BRICS countries respond to Donald Trump’s 100% tariff threats by creating and pivoting to new gold-backed currencies, effectively ending USD’s dominance.
Following the optimistic view of some BRICS+ countries, Saxo also suggested that China might inject a ¥50 trillion (~$6.88 trillion) stimulus package to bolster its markets.
The investment bank also offered some optimistic and gloomy forecasts not directly related to finance.
It predicted a revolution in medicine with the arrival of the first bio-printed human heart, the end – or at least, the fall to irrelevance – of OPEC amidst the electrification boom, but also the first-ever bankruptcy of a major insurance company due to damage caused by a natural disaster.
Finally, and circling back to Nvidia, Saxo’s Head of Commodity Strategy, Ole Hansen, forecasted additional potential headwinds for big tech in 2025. Indeed, according to the expert, the U.S. might implement an AI data center tax as power demand grows gargantuan and electricity prices ‘run wild.’
Featured image via Shutterstock
