Nvidia was ready to make history on Thursday when its market value reached a record $3.92 trillion, placing it in striking distance of being the most valuable publicly traded company in history. The ramp-up mirrors Wall Street's increasing fervor over the artificial intelligence space.
The shares in the chipmaker increased by 2.2% in morning trading, to $160.6 per share. This pushed Nvidia's market capitalisation above Apple's record high of $3.915 trillion, reached on December 26, 2024.
Renowned for its advanced AI processor designs, Nvidia has experienced tremendous demand for its recent hardware, which has played a critical role in training massive artificial intelligence models. The Santa Clara tech giant has ridden this innovation wave to unprecedented success.
While that was happening, Microsoft remained the second most valuable U.S. company with a market capitalization of $3.7 trillion as its shares increased 1.5% to $498.5. Apple, which had a slight 0.8% gain, found itself third at a $3.19 trillion value.
The escalating race between tech giants such as Microsoft, Amazon, Meta, Alphabet, and Tesla to dominate the AI-driven data center arena has served to fuel unprecedented demand for Nvidia's high-performance processors.
"When the initial company breached a trillion dollars, it was incredible. And now you're discussing four trillion, which is just mind-boggling. It tells you that there's this massive mania with AI expenditures and everyone's racing after it currently," said Joe Saluzzi, co-trader in charge of Themis Trading.
Nvidia, which started out creating graphics processors for games, has had its valuation increase almost eightfold since 2021—when it was valued at about $500 billion. The company's value now exceeds the total capitalization of Canada's entire stock market, as well as Mexico's, and even beats the combined capitalization of all the listed companies in the United Kingdom, as per LSEG data.
Nowadays, Nvidia is valued at about 32 times its expected earnings in the coming year—below its five-year average of 41—implying that earnings estimates have increased even more rapidly than its stellar stock price appreciation.
The shares of the chipmaker have recovered over 68% from their April 4 low, a time when U.S. markets were shaken by President Donald Trump's global tariff proposals. Expectation that the White House would complete trade agreements to soften the tariff effect has since seen investor optimism return, particularly in heavyweight stocks such as Nvidia. The company now accounts for about 7.4% of the S&P 500 index.
Nvidia's furious market expansion signals investors' high faith in generative AI technologies, as the company's sophisticated hardware forms the core of this digital revolution.
Since being founded by incumbent CEO Jensen Huang in 1993, Nvidia has developed from a niche enthusiast darling to a key player in the global AI ecosystem—a bellwether for the future of the wider tech sector.
The firm's recent surge comes after a slow beginning to the year, when investor interest briefly diverted away from AI towards geopolitical tensions, specifically the trade war with China. In January, China-headquartered startup DeepSeek shook markets by launching a low-cost AI model that beat many Western systems, sparking fears of demand for high-end chips falling.
In a symbolic transition in the semiconductor space, Nvidia supplanted Intel on the Dow Jones Industrial Average last November—the growing visibility of AI technologies and the rising worth of Nvidia's graphics processing units.
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