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?

Tech led US stocks on Tuesday as a key consumer inflation print showed inflation accelerated in June, big banks kicked off earnings season, and Nvidia was set to receive a green light for trade with China from the Trump administration.

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.

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

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's shares have climbed back to all-time highs as investors regain optimism in its AI infrastructure business. Generative AI will change the world. With shares up more than 50% since the start of April,

Nvidia stock hits record highs as U.S. export licenses unlock access to China’s $50B AI market. Click here to read an analysis of NVDA stock now.