Nvidia briefly touched a market capitalisation of $4 trillion on Wednesday, becoming the first company globally to reach the milestone, underscoring its dominant position in the artificial intelligence sector and reinforcing its status as one of Wall Street’s most sought-after equities.
The California-based chipmaker’s shares climbed as much as 2.8% during the session, reaching a record intraday high of $164.42, before closing up 1.80%, valuing the company at approximately $3.97 trillion. The rally continues to reflect surging investor confidence in the future of AI, a sector where Nvidia’s high-performance semiconductors are regarded as foundational infrastructure.
“This highlights the reality that capital expenditure across industries is increasingly shifting towards artificial intelligence. It is clearly the direction in which technology is heading,” said Robert Pavlik, Senior Portfolio Manager at Dakota Wealth in New York.
Nvidia’s ascent has been rapid. After achieving a $1 trillion market valuation in June 2023, the company has effectively tripled its worth within a year—outpacing the trajectory of both Apple and Microsoft, the only other US-listed firms with valuations exceeding $3 trillion.
Microsoft currently holds the position of the second-most valuable company in the United States, with a market capitalisation of $3.74 trillion. Its shares closed 1.4% higher at $503.51.
Despite a subdued start to the year, prompted by market concerns over a low-cost AI model developed by China’s DeepSeek, Nvidia has rebounded strongly—up approximately 74% from its April lows. That recovery coincided with renewed optimism around trade negotiations involving the United States, contributing to record highs in the broader S&P 500 Index. Nvidia now comprises 7.3% of the benchmark index, ahead of Apple and Microsoft, which account for approximately 7% and 6%, respectively.
Nvidia’s current valuation surpasses the combined worth of all publicly listed companies in both Canada and Mexico, and exceeds the entire UK equities market, according to LSEG data.
The company’s 12-month forward price-to-earnings ratio recently stood at 32—below its three-year average of 37—indicating continued appetite from investors despite its substantial growth.
However, while Nvidia remains the dominant supplier of AI chips, major clients such as Amazon, Microsoft, and Alphabet are under increasing investor pressure to curtail expenditure on AI infrastructure. Meanwhile, competitors including Advanced Micro Devices are seeking to capture market share through more cost-effective alternatives.
Nvidia posted first-quarter revenue of $44.1 billion, representing a 69% year-on-year increase. The company has guided for second-quarter revenue of approximately $45 billion, plus or minus 2%, and will release those figures on 27 August.
Year-to-date, Nvidia shares have risen around 22%, outperforming the Philadelphia Semiconductor Index, which is up nearly 15%.
-Reuters
