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Currently, of the more than 5,500 firms listed on U.S. exchanges, just 10 have market values exceeding $1 trillion.
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An optimistic analyst suggests that Wall Street’s largest listed company has the key factors necessary to easily exceed a $7 trillion valuation.
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On the contrary, long-time critics of the Magnificent Seven argue that inherent disadvantages and valuation issues might bring down one of the fastest-growing stocks valued at $1 trillion.
As of the market close on October 10, investors had a choice of over 5,500 publicly traded stocks on major U.S. exchanges. Among these is the so-called trillion-dollar club.
This elite group includes all members of the Magnificent Seven: Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta Platforms, and Tesla, along with Broadcom, Taiwan Semiconductor Manufacturing, and Berkshire Hathaway.
These companies are key players on Wall Street, each possessing competitive edges or sustainable advantages in various sectors.
However, despite their historical outperformance, views on these high-value companies, particularly from Wall Street analysts, can differ significantly. Recently, the largest publicly traded company set a higher price target, indicating potential gains of up to 64%. Conversely, another analyst warned of a potential drop of up to 95% for one of the elite $1 trillion stocks.
Perhaps it’s not surprising that Nvidia, a frontrunner in the AI sector, is the most highly regarded stock by analysts on Wall Street.
Since late 2022, Nvidia’s market cap has soared beyond $4 trillion. Cantor Fitzgerald’s analyst CJ Muse recently raised his price target for Nvidia from $240 to $300 a share. If accurate, this would represent a 64% increase based on the stock’s closing price on October 10, giving Nvidia a valuation of approximately $7.3 trillion.
Muse considers Nvidia a top pick for AI infrastructure and disregards fears of a bubble in AI. His research outlines a scenario where a small number of tech giants promise stable demand, with Nvidia controlling at least 75% of the AI accelerator market. Additionally, he highlighted Nvidia’s new partnership with OpenAI as a significant factor supporting high demand for its AI hardware.
Looking ahead, Nvidia’s CEO, Jensen Huang, aims to maintain a technological edge by releasing a new advanced AI GPU each year, with models like Vera Rubin and Vera Rubin Ultra set to launch in late 2026 and 2027. So far, no competitors have come close to matching Nvidia’s AI hardware capabilities.
An often-overlooked aspect is Nvidia’s CUDA software platform. This toolkit enables developers to fully utilize Nvidia’s hardware, especially for building and training large language models, thus ensuring client loyalty within Nvidia’s ecosystem.
Nonetheless, while analysts are largely bullish on Nvidia, history suggests caution. Muse doesn’t anticipate an AI bubble burst, but technological innovations rarely escape unharmed. Overhyping early technology adoptions, like AI, has historically led to issues for investors. Many firms, even now, aren’t seeing returns or optimizing their AI solutions—traces of a potential bubble.
Another concern for Nvidia is that many of its major customers, including several Magnificent Seven members, have started developing their AI chips in-house. Although these in-house chips may not match Nvidia’s power, they are cheaper and easily accessible, which could lead to Nvidia losing market share in data centers and the AI GPU shortage easing.
However, optimism isn’t shared universally among Wall Street’s top $10 trillion stocks, particularly for electric vehicle maker Tesla.
GLJ Research analyst Gordon Johnson, a long-time skeptic of Tesla, reiterated a price target of $19.05 per share, based on calculations using a 15-times earnings multiple at a 9% discount rate.
Johnson’s recent comments have pointed to structural weaknesses and valuation concerns as reasons Tesla’s stock could decline.
He noted that most Magnificent Seven businesses derive much of their income from high-margin software, while Tesla’s revenue relies heavily on low-margin vehicle sales. The challenge is evident as Tesla has lowered its EV prices multiple times in recent years, negatively affecting profit margins.
Moreover, Johnson has expressed concerns about Tesla’s valuation. While most automotive stocks trade at low single-digit price-to-earnings ratios, Tesla stands at an alarming 242 times its estimated earnings for 2025, especially as its sales are projected to drop by 4% this year and its earnings have been declining for the past three years.
Another key risk for Tesla stock lies with CEO Elon Musk. Despite expanding Tesla’s scope and introducing new EVs, Musk has a history of over-hyping and under-delivering on promises.
He’s been claiming Level 5 autonomy for eleven years, while the company has yet to move beyond Level 2. The much-anticipated robotaxi rollout has been limited to a geofenced area in Austin, and progress on the humanoid robot, Optimus, has stalled.
These unmet expectations are part of Tesla’s market valuation but add little value. If Tesla’s worth continues to hinge on these unfulfilled claims, Johnson’s price target may indeed come to fruition.
Before considering an investment in Nvidia, it’s worth noting some important points.
Our analysis team has highlighted ten stocks they believe could yield significant returns soon, and surprisingly, Nvidia isn’t among them.
As you consider options, remember that the stock advisor team has achieved an average return of over 1,060%, compared to the S&P 500’s 187%—a notable advantage.
