Jackson anticipates that Nvidia's stock will reach $250 per share, representing a potential upside of 101% from current levels. This surge could propel the market capitalization of the artificial intelligence (AI) chip company to a staggering $6 trillion.

The basis for Jackson's bullish outlook lies in Nvidia's relatively cheap valuation. He notes that historically, Nvidia's average forward price-to-earnings (P/E) multiple over the past five years has been 40 times. Recently, the stock's forward P/E multiple dipped slightly to 39 times following a two-day correction. However, Jackson stresses that Nvidia's stock has experienced periods in the past where the forward P/E multiple has surpassed 50 times, even reaching approximately 70 times before pulling back.

As investors begin to focus on Nvidia's earnings potential in 2025 and 2026, Jackson believes that the company's valuation could surpass its average forward P/E multiple and move closer to its peak. He suggests that the market has yet to fully reflect the anticipated euphoria surrounding Nvidia's future prospects.

Nvidia's shares have already soared an impressive 151% year-to-date, briefly making the chip maker the most valuable company in the world last week with a market valuation of approximately $3.3 trillion. Jackson believes that as the market recognizes the success of Nvidia's Blackwell chips and the promising gross margins associated with them, along with the potential of the upcoming Rubin chips, investor enthusiasm will fuel an even loftier go-forward price-earnings multiple. If this scenario unfolds, Jackson believes Nvidia's market cap could reach an astounding $6 trillion.

Addressing comparisons to the dot-com era, Jackson dismisses any parallels between Nvidia and Cisco, stating that Cisco's go-forward P/E multiple reached its peak at around 136 times during that period. He emphasizes that despite Nvidia's remarkable performance, the current valuation is still relatively cheap compared to its past trading levels.

Jackson's positive stance on Nvidia is not unique on Wall Street. Constellation Research and Rosenblatt have set a $200 price target for Nvidia's stock, while Bank of America recently reiterated its target of $150. However, even with these bullish forecasts, Nvidia's stock is not immune to sharp declines, as proven by the recent three-day correction that wiped out over $400 billion in market value.

As the year progresses and the sales of Nvidia's chip products thrive, the market will likely closely watch the company's earnings reports and use them to recalibrate expectations. Should the anticipated euphoria materialize, Nvidia's stock could see significant gains, pushing the company's market capitalization to unprecedented heights.

Disclaimer: The above article is based on publicly available information, and its content should not be considered financial advice. Readers should do their own research and consult with a financial professional before making investment decisions.