Nvidia (NVDA.O) is poised to become the most valuable company in history, with its market capitalisation reaching $3.92 trillion on Thursday. This surge in valuation is driven by booming demand for its high-end AI chips, as major tech firms race to dominate artificial intelligence infrastructure.
Key highlights:
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Stock Performance: Nvidia shares rose 2.2% to $160.60, pushing its market cap past Apple's record closing value of $3.915 trillion set on December 26, 2024.
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Top Three Rankings:
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Nvidia: $3.92 trillion (first)
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Microsoft (MSFT.O): $3.7 trillion (second)
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Apple (AAPL.O): $3.19 trillion (third)
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Nvidia’s ascent is fueled by its dominance in AI processors, as companies like Microsoft, Amazon, Meta, Alphabet, and Tesla invest heavily in building AI data centres.
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The company’s market cap is now larger than the combined stock markets of Canada and Mexico, and it also surpasses the entire UK market in total value.
Investor sentiment and valuation:
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Joe Saluzzi of Themis Trading remarked, “When the first company crossed a trillion dollars, it was amazing. And now you're talking four trillion, which is just incredible… there's this huge rush with AI spending.”
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Nvidia is trading at around 32x forward earnings, below its five-year average of 41x, indicating that earnings estimates are rising even faster than the stock.
Resilience and AI leadership:
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Nvidia's stock is up over 68% since its April 4 low, when markets dipped due to concerns about Donald Trump’s global tariff announcements. Optimism around future trade deals has since lifted sentiment.
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Nvidia now represents 7.4% of the S&P 500, reflecting its immense influence in the index.
Company transformation:
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Co-founded by Jensen Huang in 1993, Nvidia began as a video game hardware company and has evolved into the poster child of generative AI.
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The company replaced Intel on the Dow Jones Industrial Average last November, a symbolic shift that highlights the industry’s pivot from general-purpose CPUs to AI-centric graphics processors.
Although Nvidia faced headwinds earlier this year—such as DeepSeek's lower-cost AI models from China—it has rebounded strongly, reaffirming its central role in the global AI race.
