 "Representative photograph for tech giant Nvidia. (Photo: Reuters)")
Chipmaker Nvidia on Wednesday became the first public company in history to reach a market value of $4 trillion, as its stock price continues to rise steadily. The shares of the top chip designer rose to roughly 2.4 per cent to $164. The company is benefiting from the ongoing surge in demand for artificial intelligence technologies , making it one of the most profitable companies globally.
It is pertinent to note that Nvidia’s chips and associated software are considered world leaders for building artificial intelligence products. The company achieved the $1 trillion in market value for the first time back in June 2023. Since then, the surge continued with its unabated market value. The total value of its shares has more than tripled in about a year, faster than Apple and Microsoft , which are the only two American firms with a market value of more than $3 trillion.
It was Apple which became the first company to reach the market valuation of $3 trillion. Meanwhile, Microsoft currently stands as the second-biggest US company with a market value of about $3.75 trillion. Nvidia’s growth has been so colossal that its value is now equivalent to 7.3% of the entire S&P 500 , Wall Street’s benchmark share index. Apple and Microsoft account for about 7 & 6 per cent respectively.
Even Trump’s tariff couldn’t stop its growth
It is pertinent to note that Nvidia recorded a 74 per cent rebound from its April low when global markets were jolted by sweeping reciprocal tariffs introduced by US President Donald Trump. If Trump’s tariffs are to be set in motion, US export controls would forbid Nvidia from selling its most advanced chips to China, a restriction the company has pushed back on.
However, optimism around both the US and China will strike a trade deal has led to the rise in stocks, with the S&P 500 hitting an all-time high. In light of this, Daniel Ives, tech analyst at Wedbush, predicted that more big tech giants will come to join Nvidia in the $4 trillion market club.
“The poster children for the AI revolution are led by Nvidia and Microsoft as both are foundational pieces of building on the biggest tech trend we have seen in our 25 years covering tech stocks on the Street,” he told The Guardian. Ives noted that Microsoft will be hitting the mark “this summer”, “and then over the next 18 months the focus will be on the $5tn … as this tech bull market is still early being led by the AI revolution.”