Nvidia notched a market capitalisation of $4-trillion on Wednesday, making it the first public company in the world to reach the milestone and solidifying its position as one of Wall Street’s most-favoured stocks.
Shares of the leading chip designer rose as much as 2.5% to an all-time high of $164, benefiting from the ongoing surge in demand for AI technologies.
Nvidia’s soaring market value underscores Wall Street’s confidence in the rapid growth of AI, with the company’s high-performance chips forming the backbone of this technological advance.
The stock’s recent rally follows a sluggish start to the year, when the emergence of a Chinese discount AI model developed by DeepSeek shook confidence in stocks linked to the sector.
“It started out as being a gaming chipmaker and then a crypto mining chipmaker and now as a chipmaker for AI computing power,” said Art Hogan, chief market strategist at B Riley Wealth.
“It is continuing to move forward and be a clear early winner of AI.”
Nvidia achieved a $1-trillion market value for the first time in June 2023 and tripled it in about a year, faster than Apple and Microsoft, the only other US firms with a market value of more than $3-trillion.
Microsoft is the second biggest US company, with a market capitalisation of $3.75-trillion. Its shares were last up 1.3% at $503.
Nvidia has rebounded about 74% from its lows in April, when global markets were jolted from US President Donald Trump’s tariff volley.
Optimism around trade partners reaching deals with the US have lifted stocks of late, with the S&P 500 hitting an all-time high.
Nvidia holds a 7.3% weight on the S&P 500, the biggest on the index. Other tech behemoths, Apple and Microsoft, account for about 7% and 6%, respectively.
The company is worth more than the combined value of the Canadian and Mexican stock markets, according to LSEG data, and exceeds the total value of all publicly listed companies in the UK.
Nvidia’s stock trades at a 12-month forward price-to-earnings ratio of 32, below its three-year average of 37, according to data compiled by LSEG.
It reported a total revenue of $44.1bn in the first quarter, marking a 69% jump from a year ago along with a profit of 81c a share.
For the second quarter, Nvidia expects revenue of $45bn, plus or minus 2%. It will report second quarter results on August 27.
Including the session’s gains, Nvidia is up more than 22% this year compared with a nearly 15% rise in the Philadelphia SE Semiconductor index.
Reuters
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