Nvidia briefly reached a $4 trillion market valuation on Wednesday, becoming the first company ever to hit this milestone. The achievement underscores its dominant position in the artificial intelligence (AI) chip sector and its growing weight on global markets.
AI Surge Propels Nvidia’s Historic Growth
Shares of Nvidia rose as much as 2.8% to an all-time high of $164.42, before closing with a 1.80% gain. That brought its final market value to $3.97 trillion. Since June 2023, when it first reached the $1 trillion mark, Nvidia has tripled its value in just over a year—outpacing tech giants Apple and Microsoft, who also sit above $3 trillion in market cap.
The company’s continued rise highlights Wall Street’s growing confidence in AI. Its high-performance chips remain essential for the expansion of AI technologies.
“It highlights the fact that companies are shifting their asset spend in the direction of AI and it’s pretty much the future of technology,” said Robert Pavlik, Senior Portfolio Manager at Dakota Wealth in New York.
Nvidia’s stock has rebounded by around 74% since April, when investor confidence dipped due to rising competition from China’s DeepSeek and geopolitical concerns.
Rivals Emerge Amid Strong Earnings and Forecasts
Despite competition from AMD and other low-cost chipmakers, Nvidia continues to dominate the AI hardware market. The company reported $44.1 billion in revenue in the first quarter, marking a 69% increase from the previous year. For Q2, Nvidia expects revenue of $45 billion, give or take 2%, with official results due on August 27.
The chipmaker’s current 12-month forward price-to-earnings ratio sits at 32—below its three-year average of 37, based on LSEG data. This suggests investor expectations remain high while keeping valuation in check.
Meanwhile, other major tech companies such as Amazon, Microsoft, and Alphabet are facing growing investor scrutiny over their AI investments. These firms remain Nvidia’s biggest customers, yet they are under pressure to limit expenditure as market maturity increases.
Wall Street Confidence Drives Momentum
Nvidia’s influence on U.S. equity markets continues to grow. The company now accounts for 7.3% of the S&P 500 index—surpassing Apple’s 7% and Microsoft’s 6%.
Optimism over U.S. trade negotiations has also buoyed tech stocks, pushing the S&P 500 to new highs. At its current valuation, Nvidia is now worth more than the combined stock markets of Canada and Mexico, and exceeds the value of all publicly listed companies in the UK.
Including recent gains, Nvidia’s shares are up 22% year-to-date, compared to the Philadelphia Semiconductor Index’s 15% rise. With AI adoption expanding and demand for Nvidia’s chips remaining strong, the company appears poised to maintain its leadership in the next wave of tech-driven growth.
