Nvidia stock continues to soar as analysts raise targets to $250 on AI chip demand. Can the rally hold, or is NVDA getting ahead of itself?

The stock is worth $4 trillion for a good reason. Nvidia's dominance in AI chips allows it to earn very high margins. Nvidia made $77 billion in net income on $148 billion of revenue over the last year, and its net income has increased 892% over the last three years.

Nvidia said it has filed applications to resume selling H20 GPUs in China and has received assurances that licenses will be granted.

One analyst boosted his price target on Nvidia’s stock to a level that would imply a $5.7 trillion market cap, with the chip maker seemingly cleared to sell its H20 chip in China again.

Nvidia stock's surge looks poised to accelerate because investors' biggest concern about the company -- losing the Chinese data center AI chip market -- is now a non-issue.

Currently, Nvidia accounts for nearly 8 percent of the S&P 500. That’s the highest weighting for a single stock in 45 years, according to Todd Sohn, senior ETF strategist at Strategas Securities. For context, industrials account for 8.7 percent of the index, while healthcare stands at 9.1 percent.

Nvidia Corporation's $4T valuation is driven by AI growth, global partnerships, and quantum computing. Click to explore why it's not too late to invest in NVDA.

Daniel Sparks and/or his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel and Nvidia. The Motley Fool recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy.