The green glow of pre-market tickers seems to be the default setting for anyone following Nvidia these days. Another day, another gap up. This time, a 3.2% jump before the opening bell, hot on the heels of a 5% surge. The proximate cause was the company’s GTC event, a showcase that sent analysts scrambling to revise their models upward.
Among them was D.A. Davidson’s Gil Luria, a 5-star analyst on TipRanks, who lifted his price target on NVDA to $250 from $210. (Top D.A. Davidson Analyst Lifts Nvidia Stock (NVDA) Price Target as GTC Event Reinforces Robust Demand) The move is emblematic of a broader sentiment: Nvidia is not just a leader in AI compute; it is the market for AI compute. The company is now hurtling toward a market capitalization that was once unthinkable for any single entity: $5 trillion. The narrative is powerful, clean, and, on the surface, unassailable.
But a narrative is not an analysis. Buried beneath the headlines of record highs and bullish reaffirmations is a numerical discrepancy so large it demands scrutiny. It's a quiet gap between the company’s own projections and the consensus view from the very street that's bidding up its stock. And in that gap lies the real story—a $134 billion question that will define whether this is a sustainable new plateau or the peak of a speculative fever.
The $134 Billion Discrepancy
Let's cut through the noise. The core of Luria’s upgraded bull case rests on a simple but profound observation: Wall Street may be systematically underestimating demand. He notes that Nvidia’s management expects to generate a staggering $500 billion in revenue from its Blackwell and forthcoming Rubin GPU generations through Fiscal 2026. This projection is based on the sale of 20 million GPUs, a figure that implies an almost bottomless appetite for computational power from the likes of OpenAI, Microsoft, and Google.
And this is the part of the report that I find genuinely puzzling. Wall Street's consensus forecast for Nvidia’s data center revenue over that exact same period is approximately $366 billion. The company’s internal forecast isn't just slightly more optimistic; it's a full 37% higher—to be more precise, 36.6% higher—than the average analyst estimate. That’s a $134 billion difference. It's a rounding error for some countries' GDP, yet it sits at the heart of the valuation for the world's most valuable company.
This isn't just a minor disagreement on growth rates. It's a fundamental schism in outlook. Either Nvidia's management has a uniquely clear view of a demand pipeline that analysts cannot yet model, or the analysts are correctly pricing in risks that the company is publicly downplaying. Which is it? Is the market truly discounting this massive potential upside, as Luria suggests, or is it implicitly hedging against the possibility that this "insatiable demand" might, at some point, be quenched?
Expecting the market to fully absorb this kind of forward guidance is like trying to price in a hurricane based on a single satellite image. The potential is obvious, but the variables—competition, macroeconomic shifts, the simple physics of building out that much infrastructure—are immense. We're no longer talking about forecasting quarterly earnings; we're talking about forecasting the infrastructural build-out of an entirely new technological era.
The Gravity of a 1,150% Gain
While one side of the market is focused on this potential future revenue, the other is looking at the past. Nvidia's stock has climbed 1,150% since early 2023. Ascribing rational valuation metrics to that kind of parabolic move is difficult, if not impossible. At some point, the law of large numbers begins to exert its gravitational pull.
The case for caution isn't just about valuation, either. It’s about competition. For years, Nvidia has enjoyed a near-monopoly on high-end AI GPUs, holding a dominant 92% share of the data center market. But the landscape is shifting. Competitors are no longer hypothetical. Advanced Micro Devices (AMD) recently secured a significant deal with OpenAI for its Instinct MI450 series chips. Broadcom, with its application-specific integrated circuits (ASICs), also landed a major 10-gigawatt deal with the same AI research leader.
To be clear, Nvidia still holds the pole position, having kicked things off with its own massive deal and a potential $100 billion investment in OpenAI. But these other deals signal a crucial change: the biggest customers are actively diversifying their supply chains. Relying on a single supplier for the most critical component of the AI revolution is a strategic risk no sane CEO would take. Expecting Nvidia to maintain a 92% market share indefinitely is like expecting a single oil well to supply the entire world forever. Eventually, other drillers find a way in, or the market engineers a more efficient engine.
This brings us to the broader "Magnificent Seven" context. Some analysts are already looking past Nvidia, suggesting that a company like Amazon, with its tendrils in cloud (AWS), advertising, and logistics, is a better-positioned AI beneficiary over a 10-year horizon. (If I Could Buy Only 1 "Magnificent Seven" Stock Over the Next 10 Years, This Would Be It (Hint: Not Nvidia)) Amazon's stock trades at just 33 times trailing earnings (a slight premium to the S&P 500), while Nvidia’s valuation metrics are, to put it mildly, stratospheric. Is the market correctly pricing Nvidia's singular dominance, or is it overlooking the diversified, less-hyped AI integration happening at companies like Amazon?
The Math vs. The Momentum
Ultimately, the Nvidia story has become a battle between two powerful forces. On one side, you have undeniable momentum, a visionary CEO, and a product that is the critical bottleneck for the most important technological shift of our generation. On the other, you have the cold, hard math of market share, competitive encroachment, and a valuation that has priced in not just perfection, but something beyond it.
The $134 billion gap between management's outlook and Wall Street's consensus isn't just an interesting data point; it's everything. It is the quantifiable measure of the market's faith versus its skepticism. If Nvidia hits that $500 billion target, today's price might look reasonable in hindsight. If they fall short and land closer to the $366 billion consensus—or worse, below it—the repricing will be severe. The current stock price is a bet on the former. As an analyst, my job is to remain focused on the numbers, and right now, the most important number is the one that isn't yet on any official balance sheet.