Nvidia Makes History, Surpasses $4 Trillion Market Cap Amidst Valuation Debate
Nvidia Makes History, Surpasses $4 Trillion Market Cap Amidst Valuation Debate
Nvidia (NASDAQ:NVDA) has officially shattered records, becoming the first company in history to cross the monumental $4 trillion market capitalization threshold. This unprecedented milestone was achieved on Wednesday, marking another significant chapter for the chip giant.
The rapid ascent has inevitably intensified discussions surrounding Nvidia’s valuation, with a chorus of skeptics raising concerns about a potential ‘bubble.’ However, one influential investor, operating under the pseudonym Agar Capital (AC), is pushing back against these fears, asserting that Nvidia’s current valuation is entirely justified.
According to Agar Capital, Nvidia’s valuation is “justified by its dominant AI infrastructure, explosive earnings growth, and unmatched margins, not by speculative hype or bubble dynamics.” AC views Nvidia not merely as a ‘buzzword,’ but as the fundamental ‘engine room’ driving a technological revolution, consistently delivering unparalleled profits and cash flow.
Skeptics have voiced similar doubts as Nvidia grew from $500 billion to $1 trillion and then $2 trillion. Now, at $4 trillion, these concerns persist. Yet, Agar Capital contends that “The price isn’t the problem. It’s the market’s incredulity,” emphasizing the company’s status as arguably the most ‘powerful margin machine’ globally.
The investor highlights Nvidia’s impressive financial performance, including $44 billion in revenue and $26 billion in cash in just the first quarter of FY26. Approximately 90% of this revenue now stems from data centers, a segment experiencing expanding margins fueled by the rapid adoption of new Blackwell chips and increasing demand for proprietary networking technologies like NVLink and Spectrum-X.
While acknowledging the stock isn’t ‘cheap,’ Agar Capital argues that labeling it ‘expensive’ is misleading. Nvidia’s P/E ratio continues to fall as its earnings per share (EPS) surge, and its PEG ratio hovers around 1, indicating that growth is effectively keeping pace with its valuation. Compared to industry peers such as AMD, Intel, and Broadcom, Nvidia stands out for its superior profitability, high-quality earnings, and robust returns on capital, solidifying its role as the backbone of the AI-driven economy. Agar Capital concludes, “This is not a bubble. It is a dominant position monetized to the highest degree.”
Unsurprisingly, Agar Capital maintains a ‘Buy’ rating for NVDA shares. This sentiment is broadly shared across Wall Street, where Nvidia boasts a ‘Strong Buy’ consensus rating, based on a majority of ‘Buy’ recommendations from analysts.
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