Nvidia Hits $4 Trillion, Sets Historic Market Record
Nvidia has become the first publicly traded company in history to hit a $4 trillion market value. On Wednesday, shares of the AI chip giant climbed as much as 2.5% to a record $164, driven by persistent enthusiasm surrounding artificial intelligence technologies. This milestone not only cements Nvidia’s dominance in the chip sector but also places it ahead of major U.S. tech firms in terms of growth pace.
Despite a shaky start to the year partly caused by the arrival of a cheaper AI model from China’s DeepSeek Nvidia has bounced back with vigor. Since April, its stock has surged roughly 74%, helped in part by easing global trade tensions and renewed optimism around U.S. agreements with major partners. This bullish sentiment also contributed to the S&P 500 hitting a new peak.
Notably, Nvidia first reached a $1 trillion valuation in June 2023 and has since tripled that figure in just about a year. This feat outpaces both Apple and Microsoft, which are also members of the exclusive $3 trillion club. Microsoft, currently the second-largest U.S. firm, has a market capitalisation of $3.75 trillion, with its shares recently up by 1.3% at $503.
The Numbers Behind Nvidia’s Dominance
Nvidia’s importance on Wall Street is reflected in its 7.3% weighting on the S&P 500 the highest among all companies. In comparison, Apple and Microsoft represent about 7% and 6%, respectively. The firm’s market value now exceeds the combined worth of Canada and Mexico’s stock markets, according to LSEG data, and is larger than the total value of all publicly listed companies in the UK.
Even as its stock soars, Nvidia remains relatively attractively priced. It currently trades at a 12-month forward price-to-earnings ratio of 32, which is below its three-year average of 37. This suggests that, despite its rise, the stock may not yet be overheated.
What continues to set Nvidia apart is its central role in the global AI revolution. Its chips are powering a wide range of applications, helping to drive robust investor confidence. For the first quarter, the company reported $44.1 billion in revenue a 69% year-over-year increase alongside an 81 cents per share profit.
Future Outlook and Market Impact
Looking ahead, Nvidia forecasts $45 billion in revenue for the second quarter, plus or minus 2%. Investors are eagerly awaiting its earnings report, scheduled for August 27. If expectations hold, the company could further solidify its lead in the tech space.
So far this year, Nvidia shares have risen over 22%, outpacing the nearly 15% gain in the Philadelphia SE Semiconductor Index. The company’s continued growth trajectory and strategic importance in the AI sector signal that this $4 trillion benchmark might not be the final peak.
