Nvidia hit a US$1-trillion market value for the first time in June, 2023.Shir Torem/Reuters
Nvidia Corp. NVDA-Q briefly reached a market capitalization of US$4-trillion on Wednesday, making it the first 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 2.8 per cent to an all-time high of US$164.42, benefiting from an ongoing surge in demand for artificial-intelligence technologies.
The company’s stock ended with a gain of 1.80 per cent, leaving it with a market value of US$3.97-trillion.
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.
“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. The stock’s recent rally follows a sluggish start to the year, when the emergence of a Chinese discount artificial-intelligence model developed by DeepSeek shook confidence in stocks linked to the sector.
Nvidia achieved a US$1-trillion market value for the first time in June, 2023, and tripled it in about a year, faster than Apple Inc. AAPL-Q and Microsoft Corp. MSFT-Q, the only other U.S. firms with market values above US$3-trillion.
Microsoft is the second-most valuable U.S. company, with a market capitalization of US$3.74-trillion. Its shares gained 1.4 per cent on Wednesday to close at US$503.51. Nvidia has rebounded about 74 per cent from its lows in April, when global markets were jolted from U.S. President Donald Trump’s tariff volley.
Optimism around trade partners reaching deals with the U.S. has lifted stocks of late, with the S&P 500 hitting an all-time high.
Nvidia accounts for 7.3 per cent of the S&P 500. Apple and Microsoft account for around 7 per cent and 6 per cent, respectively.
Nvidia is now worth more than the combined value of the Canadian and Mexican stock markets, according to LSEG data, and it exceeds the total value of all publicly listed companies in the U.K.
Its stock recently traded at a 12-month forward price-to-earnings ratio of 32, below its three-year average of 37, according to data compiled by LSEG.
While Nvidia’s chips dominate the AI industry, Amazon.com Inc., Microsoft, Alphabet Inc. and other major customers have faced pressure from investors to rein in their heavy spending on AI.
As well, Advanced Micro Devices Inc. and other rivals aim to take some of Nvidia’s market share by selling lower-cost processors. Nvidia reported total revenue of US$44.1-billion in the first quarter, marking a 69-per-cent jump from a year ago.
For the second quarter, Nvidia expects revenue of US$45-billion, plus or minus 2 per cent. It will report second-quarter results on Aug. 27.
Including the session’s gains, Nvidia is up about 22 per cent this year compared with a nearly 15-per-cent rise in the Philadelphia SE Semiconductor Index.