CNBC’s “Halftime Report” team discusses Nvidia's historic market cap and how to trade the stock.

Nvidia's market cap has crossed the $4.5 trillion mark, propelled by rapid revenue growth and robust demand for its AI hardware. Analysts highlighted Nvidia's unique position as the leading beneficiary of global AI infrastructure spending, citing recent major deals and upwardly revised price targets from financial institutions. 

While some investors are trimming positions to manage portfolio risk, the consensus remains that Nvidia is the most direct way to gain exposure to the AI sector. Experts note that ongoing capital expenditure by major technology companies and international expansion are likely to support Nvidia's growth, though they caution that any slowdown in AI spending could impact the company's trajectory.

How to trade Nvidia as it crosses $4.5 trillion market cap

So we'll keep it on the desk, because everybody does own NVIDIA. Joe, you want to take this one while we work on Josh's audio? All you need to do is just look at the growth of revenue. It's absolutely staggering. $26 billion in 2023, $60 billion in 2024, $130 billion in 2025. Estimate for 2026, $206, $276 in 2027, $321 in 2028. I mean, that's just historic. It's unprecedented. It's something we have never seen in the capital markets, and it's the reason behind the astronomical performance that this company is exhibiting. So the target goes to $210 today from $200 at Citi on higher AI infrastructure. The target at KeyBank is now $250. We'll go back to Josh Brown as we've fixed his audio. So I don't need to look to the side and do, like, what's up with that? I can't hear anything because I'm told now I can. My bad. There we go. Look. There we go. Look, I think the big takeaway for investors from this whole era is that sometimes the most obvious way to play a theme is the most obvious way to play a theme. You have to remember, 25 years ago, I was a retail stockbroker, and we were trading the original dot-com boom. Every time a stock would make a huge move, like a Dell computer or a Cisco or a JDS Uniphase or a Lucent technology, my clients would be like, OK, but what's the next, right? What's the next Lucent? What's the next Cisco? And we would end up in stocks that would obviously blow up like Sienna, and we would end up with things like Juniper Networks and Sycamore. Old timers watching the show will be chuckling along with me. NVIDIA is still the most obvious way to play the AI build-out theme. Just look at the CoreWeave deal today. It's a $14.2 billion agreement with Meta. It's great for CoreWeave because it diversifies them a little bit away from Microsoft and adds another monster company to their roster of clients in a very big way. But what does Meta get out of this? They're getting access to NVIDIA's greatest Blackwell 300 systems because CoreWeave already has that infrastructure in place and ready to go. All of this benefit accrues to NVIDIA in the end. So it may not go up the most from here relative to other AI plays, but it is the foolproof name for people that want to gain sector exposure or want to gain thematic exposure. And I don't really see that changing. They've got this unbelievable competitive position. We've been talking about it on the show forever because it's true. And everyone's always like, well, what's the next? What's the new NVIDIA? There are other ways to play AI. We've seen other chip companies work out. I've talked about Lam Research on the show. We've had Broadcom. We've had AMD. But in the end, I still think people would be better off looking for the obvious answers and defaulting to them. And if you've done that with NVIDIA, congratulations. We're now breaking into a new range. And who knows how high this one can go. Well, the question is what to do with it from here. The stock's up 18% in the third quarter. I know you're not. I do find it interesting, Amy, that you're trimming NVIDIA here. Why now? Well, we've trimmed it. We've owned it since 2014. So we've trimmed it along the way up. Every sale has been a bad sale so far. Obviously, it's making a new all-time high. Sure. So why is this time going to be different? I'm not sure it will be different. I just think I kind of agree with everything Josh said. This is the most obvious play. We're not selling out of it. But I do think it's prudent, as the position keeps getting larger, to just keep it in line. I do think at $4.5 trillion, you're kind of asking yourself, okay, what's the upside? I mean, you know what? Right. If Brad Gerstner was here right now, you know what he would tell you the upside is? Because he said it this past weekend with Jensen Wang in his podcast with Bill Gurley. The upside's $10 trillion. Mark a cap. Mark a cap. That's not $10 more trillion from here. It's a double from here. You're talking about a $10 trillion market cap. It's a double from here. I think that's a while away. And with NVIDIA, you do get opportunities to sort of go back in. It hasn't been a straight line up. And I do think you're seeing more articles about what the return on this AI, as Joe said, the trillions of dollars that are going into AI CapEx right now. What's the return on that? When are we going to start to see that? I think you will get people questioning that again on the way up if it eventually gets to $10 trillion, which, again, we'll see. I mean, this remains a key question. As Wolf, Jim, talks about AI spending expectations and how it's the biggest driver of market performance. So the hyperscalers are tripping over one another to continue to spend tens of billions of dollars towards their AI, their build outs. And for now, it's great. And that's why Citi has raised its forecast for the hyperscalers to continue to spend the way they are. The moment, and who knows when it's going to be? Could be next year, could be 10 years from now, who knows? The moment that there is a comment about spending less in CapEx, is that the moment that everybody says, oh, no? Yes. Yes, it is, Scott. But I think to the setup of your question, that we're probably a long way away from that. And it's not just because those hyperscalers have made such bold announcements. Really quite frequently and quite recently. But it's also there's other aspects to this that I don't think we give enough attention to, like the international exposure for AI build outs. Let's not forget, just a few months ago, the President Trump visit to Saudi Arabia, the data center build outs that are going on in the Middle East. Europe doesn't want to left behind. Asia doesn't want to get left behind. So I really don't think that, you know, when you consider international, I don't think that moment of truth, if we'll call it that, is anytime soon. Let's look at NVIDIA again, guys. Put it back up for me, please. And take it out at least a year. Just to show you, it's not immune to sell downs. We've seen it happen. And it, give me a year now, if you could. Because it didn't happen that long ago. If you look at the one year, it was in the spring that the stock had that reset. It got into the 90s. And here we are with a reboot, a double since then. It did along with the market. And it really was a source of liquidity in ATM, if you would, at that point. I think if you're owning NVIDIA, you're asking yourself the question, Jim nails it. I mean, and you brought it up to Jim, Scott. It is all the risk surrounds the spending slows. Okay, how are we funding the spending right now? If you take the Mag 7, obviously NVIDIA is not going to be part of this. And you also put Tesla to the sidelines. You're left with five companies who have $480 billion in free cash flow from operations this year to spend on the build out. Citi says CapEx across the hyperscalers is going to increase in 26 from 420 to 490 billion. So you're approaching a half a trillion dollars in spend. And through 29, through 2029, from 2.3 trillion to near 3, to 2.8. So you're already looking out to 29. I mean, are we buying these stocks today trying to guess what 2029 is going to look like? If we're suggesting that a lot of the market performance is in fact being driven by the spend, as Wolf suggests. I would be remarkably surprised if along the journey to 2029, there is not some form of a stumble, whether it's in the economy that allows that free cash flow grow, not to continue at the pace that we've seen it over the last several years. So I think you have to be prepared for that. It doesn't mean I want to sell NVIDIA. It doesn't mean at the end of that journey in 2029 and 2030, NVIDIA is still not the winner. But you just have to set the expectation. This is all about the ability to generate free cash flow. And there could be some form of a stumble where these five companies don't gather the free cash with the rate they're covering. And remember, AI revenue this year is projected to be about $20 billion. So you're talking about numbers getting to trillions of dollars of spend. Yes, of course, I think the revenue will ramp. But that revenue has to ramp pretty damn fast at some point to justify these CapEx levels. Scott, let me make the pedestrian comment here that we're about to turn into the fourth quarter. And this is a year in which I don't know what the exact number is, but mid-20s as a percent of managers that are outperforming their benchmark, that becomes a problem for the other 75 percent-ish that get into the fourth quarter and say, oh, my goodness, end of year is coming. I've got to throw money at the market, particularly if they raise cash during that time that we were talking about. Joe, you said it was a source of fund in April when we had the post-liberation day meltdown. People are going to throw money at the markets. And where are they going to throw it? They're going to throw it at the obvious leaders, the things that are probably the safest.

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