Nvidia edges closer to becoming the world’s most valued company and the first to breach the $4 trillion milestone
Shares of artificial intelligence powerhouse Nvidia surged to a new all-time high on Thursday, pushing its market capitalization within reach of the $4 trillion mark. The rally puts the chipmaker firmly on track to become the world’s most valuable company and potentially the first ever to cross the $4 trillion milestone.
Nvidia’s share price rose as much as 2.4% intraday to a record high of $160.98, briefly valuing the company at $3.92 trillion. That figure eclipsed Apple’s previous record closing market capitalisation of $3.915 trillion, hit on 26 December 2024.
Although Nvidia eventually closed the session slightly off its peak, up 1.33% at $159.34, its market cap stood at $3.89 trillion, placing it ahead of both Apple and Microsoft.
Microsoft, now the second-most valuable company on Wall Street, saw its shares rise 1.58% to end the day at $498.84, giving it a market capitalisation of $3.71 trillion. Apple came in third, with its shares up 0.52% at $213.55, taking its market value to $3.19 trillion.
Fuelled by the relentless surge in demand for its AI chips, Nvidia has emerged as the leader of the current market cycle, showing no signs of slowing down. The AI boom turned fortunes for Nvidia, taking it market valuation over eightfold since 2021, going from $500 billion to nearly $4 trillion.
According to LSEG data, Nvidia’s current valuation has turned bigger than the combined market capitalization of all publicly traded companies in the UK, and is larger than the stock markets of both Canada and Mexico, Reuters reported.
However, an interesting facet about Nvidia’s meteoric rise in recent years is that despite the surge, shares of Nvidia are trading at about 32 times its expected earnings over the next 12 months, lower than its five-year average price-to-earnings ratio of around 41. What this means is that the growth in Nvidia’s expected earnings is outpacing the gains in its share price, further fuelling demand for the stock.
The company’s latest generation of AI chips is helping train some of the most advanced large language models, driving soaring demand from cloud providers and tech leaders. A fierce race among Microsoft, Amazon, Alphabet, Meta Platforms, and Tesla to build next-generation AI infrastructure has further fuelled the need for Nvidia’s cutting-edge processors.