Nvidia Reaches $4 Trillion as AI Rally Continues

Nvidia Corp. has become the first company in history to cross the $4 trillion market valuation mark, solidifying its position as the undisputed leader of the global artificial intelligence boom and a central force in equity markets. Shares of the chipmaker surged 2.8% to $164.42 on Wednesday, pushing its valuation past the milestone and extending an extraordinary rally that has captivated Wall Street.According to information,the stock has now gained over 20% in 2025 alone and has soared more than 1,000% since the start of 2023. Nvidia now represents approximately 7.5% of the S&P 500 Index—one of the highest concentrations ever for a single company.The most recent driver of this momentum has been strong and sustained AI-related capital expenditure by some of Nvidia’s largest customers. Tech giants including Microsoft, Meta Platforms, Amazon, and Alphabet are collectively expected to spend nearly $350 billion in the next fiscal year on capital investments—up from around $310 billion this year—based on average analyst projections. These four companies alone account for more than 40% of Nvidia’s total revenue.
“There’s obviously tremendous demand for Nvidia’s chips,” said Brian Mulberry, client portfolio manager at Zacks Investment Management. “Its products are essential for advancing AI to the next level, and the market has really refocused on that over the past three months. It’s been a pretty remarkable 90-day period.”The rally comes after a volatile start to 2025. In January, fears over slowing AI investments, triggered by competition from China’s DeepSeek and ongoing trade tensions involving President Donald Trump, spooked investors and dragged down shares across the AI space. Nvidia’s stock declined sharply as traders rotated into defensive sectors.However, sentiment shifted dramatically in May. Progress in trade negotiations and a strong set of quarterly results from Nvidia and its top clients reassured investors that the AI investment cycle remains in full force. Comments from Nvidia CEO Jensen Huang about robust global demand further reinforced bullish sentiment.Looking ahead, analysts believe the upcoming earnings season could provide the next catalyst for the stock. “If Nvidia beats and raises guidance—as they often do—it could trigger another leg higher,” said Ken Mahoney, president of Mahoney Asset Management. He also noted that Nvidia is currently trading at around 33 times forward earnings, below its 10-year average. “It’s not overpriced when you consider the kind of revenue growth they’re posting,” he added.Nearly 90% of analysts tracking the stock hold a buy-equivalent rating, and the consensus price target suggests a further upside of about 6% over the next year.
Nvidia’s rapid ascent has outpaced other tech heavyweights. Microsoft’s market value stands at approximately $3.7 trillion, while Apple, which became the first firm to touch $3 trillion in early 2022, now sits around $3.1 trillion. Notably, when Apple reached the $3 trillion mark in mid-2023, Nvidia was valued at roughly $1 trillion—highlighting the breakneck pace of the chipmaker’s rise.

“Investors often fall in love with top-performing stocks, and while that can be rewarding, it also introduces risks,” said Brian Buetel, managing director at UBS Wealth Management. “When momentum stocks as influential as Nvidia face a correction, it can lead to significant market volatility.”Beyond Nvidia, other tech firms in the trillion-dollar club include Alphabet and Amazon, both valued above $2 trillion. Meta also remains in the elite group, while Tesla has slipped below the threshold.

(Business Correspondent)