Nvidia briefly reached a capitalization of $4 trillion

Nvidia briefly reached a market capitalization of $4 trillion on Wednesday, marking a historic milestone as the first company to hit this value and confirming its status as one of Wall Street’s most favored stocks. Its shares climbed up to 2.8%, hitting a record $164.42, supported by surging demand for artificial intelligence technologies.

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The session closed with Nvidia’s stock up by 1.80%, giving it a market value of $3.97 trillion. This milestone emphasizes investors' strong belief in AI’s rapid expansion, where Nvidia’s high-performance chips are foundational to the sector’s growth.

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“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.

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Despite a rocky start to the year, shaken by the launch of a low-cost AI model from China’s DeepSeek, Nvidia has rebounded sharply—up around 74% from its April lows. The company first crossed the $1 trillion mark in June 2023 and has now tripled its value in just over a year—outpacing even tech giants Apple and Microsoft.

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Microsoft remains the second most valuable U.S. company with a $3.74 trillion valuation, following a 1.4% rise in its shares to $503.51. Nvidia’s current value also surpasses the total market capitalization of all publicly listed companies in the UK, and even exceeds the combined markets of Canada and Mexico.

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The company now represents 7.3% of the S&P 500 index—more than Apple and Microsoft individually. Nvidia’s 12-month forward P/E ratio stands at 32, slightly below its three-year average of 37.

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While Nvidia continues to dominate the AI chip market, it faces growing competition from AMD and others offering lower-cost processors. Meanwhile, major clients like Microsoft, Amazon, and Alphabet are being urged by investors to limit their AI spending.

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In Q1, Nvidia reported a 69% year-over-year revenue jump, reaching $44.1 billion. It forecasts Q2 revenue of around $45 billion and will release its quarterly results on August 27.

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So far this year, Nvidia has gained approximately 22%, outperforming the Philadelphia Semiconductor Index, which rose nearly 15%.

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