Nvidia reaches historic $4 trillion valuation, leads Wall Street's AI charge

USA Today

13 hours ago

Nvidia notched a market capitalization of $4 trillion on Wednesday, making it the first public company in the world to reach the milestone and solidifying its position as one of Wall Street's most-favored stocks.
Shares of the leading chip designer rose as much as 2.5% to an all-time high of $164, benefiting from the ongoing surge in demand for artificial intelligence technologies.
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.
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.
"It started out as being a gaming chipmaker and then a crypto mining chipmaker and now as a chipmaker for artificial intelligence computing power," said Art Hogan, chief market strategist at B Riley Wealth.
"It is continuing to move forward and be a clear early winner of artificial intelligence."
Nvidia achieved a $1 trillion market value for the first time in June 2023 and tripled it in about a year, faster than Apple AAPL.O and Microsoft MSFT.O, the only other U.S. firms with a market value of more than $3 trillion.
Microsoft is the second biggest U.S. company, with a market capitalization of $3.75 trillion. Its shares were last up 1.3% at $503.
Nvidia has rebounded about 74% 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. have lifted stocks of late, with the S&P 500 .SPX hitting an all-time high.
Nvidia holds a 7.3% weight on the S&P 500, the biggest on the index. Other tech behemoths, Apple and Microsoft, account for around 7% and 6%, respectively.
The company is worth more than the combined value of the Canadian and Mexican stock markets, according to LSEG data, and exceeds the total value of all publicly listed companies in the UK.
Its stock trades at a 12-month forward price-to-earnings ratio of 32, below its three-year average of 37, according to data compiled by LSEG.
It reported a total revenue of $44.1 billion in the first quarter, marking a 69% jump from a year ago along with a profit of 81 cents a share.
For the second quarter, Nvidia expects revenue of $45 billion, plus or minus 2%. It will report second-quarter results on August 27.
Including the session's gains, Nvidia is up more than 22% this year compared to a nearly 15% rise in the Philadelphia SE Semiconductor Index .SOX.
Reporting by Shashwat Chauhan and Johann M Cherian in Bengaluru; Editing by Chuck Mikolajczak and Arun Koyyur