Nvidia will hit a $6 trillion valuation by the end of the year as investors start to realize how cheap the stock is, hedge fund manager says

Slaven Vlasic/Getty Images for The New York Times; Chelsea Jia Feng/BI

Nvidia stock is still cheap based on a forward price-to-earnings multiple, according to a hedge fund manager.

Eric Jackson expects Nvidia stock to hit $250 per share by the end of the year, doubling from current levels.

Nvidia’s market cap could hit $6 trillion, bolstered by strong chip sales and investor euphoria.

Nvidia stock is set to continue its wild rally through the end of the year, according to hedge fund manager Eric Jackson of EMJ Capital.

Jackson expects Nvidia stock to hit $250 by the end of the year, representing potential upside of 101% from current levels.

Such a rally, if it materializes, would value the AI-chip company at a stunning $6 trillion.

And it’s all because Nvidia stock is still cheap on a valuation basis, according to Jackson.

“Over the last five years, Nvidia’s average look forward price-earnings multiple has been 40 times. Yesterday, after this two-day correction, it was 39 times forward price-earnings. But there have been three times in the last five years where it’s had a look forward price-earnings multiple of over 50x, and two times in the last five years where it’s gotten just about to 70x and then it pulled back. So we just haven’t seen that euphoria yet,” Jackson told CNBC on Tuesday.

Jackson is betting that as investors start to focus on Nvidia’s earnings potential in 2025 and 2026, euphoria could drive Nvidia well above its average forward P/E multiple and closer to its peak.

“This is a high flyer, and expectations can reset on a bad earnings report, but they can also get equally overhyped on good news. And despite the fact the stock has had this enormous run, the euphoria hasn’t yet caught up in terms of the go-forward multiple,” Jackson said.

Shares of Nvidia have already soared 151% year-to-date, and the chip maker was briefly the most valuable company in the world at its peak last week, with a market valuation of about $3.3 trillion.

“I think what’s going to happen in the second half of this year, as people start to see how well the Blackwell chips are selling,…

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