According to CNBC data, Nvidia currently owns more than 8% of the S&P 500.
The company’s market value closed at around $4.5 trillion on Monday, bringing an unprecedented shaking of the benchmark. This historic share of the index comes after a massive run of stock prices that have driven chip demand from late 2022.
The meetings are merciless. Nvidia’s shares rose 239% in 2023, 171% in 2024, and already rose 36% in 2025 until the end of Monday. In the past three months alone, stocks have risen 56% as the market recovered from tariff-related declines in April.
Nine of nine Wall Street analysts covering the company are rated as purchases. Currently, stocks are trading at 59 times their 12-month profit based on fact set figures, reflecting investors’ demand for their position in the AI market.
China’s risks and political agreements
Da Davidson analyst Gil Luria has received a neutral rating at Nvidia and has set a price target of $135, meaning a 26% drop from current levels. He pointed out China as a major risk.
Official reports show that there is a low double-digit sale to China, but Luria pointed out that many other cargoes will indirectly get there through overseas-based Chinese companies or resellers who move their products domestically. “It’s a big part of their sales and is at risk either from further actions by the US or from further restrictions from China,” he said.
Over the weekend, the Financial Times reported that NVIDIA and Advanced Micro Devices had reached an agreement with the US government to give 15% of the revenue from chips sold in China in exchange for export licenses.
Wells Fargo estimated that the deal could increase Nvidia’s growth by more than 20%. Luria said the arrangement could allow B30 chips to be sold this year or 2026, but stressed that the outcome remains uncertain.
Infrastructure bottlenecks and increasing competition
Even with record high demand, Nvidia’s output can be limited by infrastructure. Luria said customers are facing delays not due to chip shortages, but due to data center requirements.
Operators need sufficient power grid capacity and HVAC systems to run the chip, and those resources are already strained. He warned that the increase in electricity demand from data centers is so steep that power availability itself could slow Nvidia’s growth.
At one point, Peter Bookbar, Chief Investment Officer of BFG Wealth Partners; It was raised Another concern. competition. Amazon Web Services is building an alternative to NVIDIA GPUs to reduce AI training costs.
Boockvar said it would be difficult to maintain Nvidia’s current 75% gross profit margin. He added that some of Nvidia’s biggest clients are also working to become direct rivals, potentially eroding control in AI infrastructure in the end.
Nvidia’s unparalleled impact on the S&P 500 closely links index performance to stock prices. That rise is driven by demand for AI chips, but political tensions, energy constraints and threats from aggressive competitors still play hard.
Cryptopolitan Academy: Coming Soon – A new way to earn passive income with Defi in 2025. learn more
