Nvidia surpasses Apple, Microsoft to become world’s first $4 trillion public firm

Nvidia has made history by becoming the first publicly traded company to reach a market value of $4 trillion. This milestone was achieved on Wednesday when Nvidia's stock rose by 2.5% after the market opened, setting an intraday record high. The US chipmaker, renowned for its pivotal role in the artificial intelligence (AI) sector, has seen its market value soar approximately 20% this year, underscoring its influential position in the tech industry.

The journey to this remarkable valuation was marked by Nvidia surpassing industry giants Apple and Microsoft. Apple, which began the year as the most valuable company at around $3.9 trillion, fell behind amid recent tariff challenges. Meanwhile, Microsoft, now holding a market cap of $3.75 trillion, traded places with Nvidia before the latter surged ahead to claim the top position. Nvidia's rapid ascent is particularly notable as it achieved a $1 trillion valuation for the first time just over a year ago in June 2023.

Nvidia's growth trajectory is largely attributed to its chips that power data centres essential for AI models and cloud services used by companies like Microsoft, Amazon, and Google. This demand is set to expand further, with global spending on AI infrastructure projected to exceed $200 billion by 2028, as per The International Data Corporation. Nvidia's revenue for the quarter ending in April saw a 69% year-on-year increase, amounting to $44.1 billion.

The company originally gained prominence with its graphics processing units (GPUs), a favourite among PC gamers. Recently, Nvidia has been at the forefront of developing AI models designed for autonomous systems. Notably, during its annual developers conference in March, Nvidia unveiled the Blackwell Ultra chip, promising enhanced support for AI models with advanced reasoning capabilities.

Nvidia's stock has rebounded significantly, increasing by approximately 74% from its lows in April, a period marked by global market disruptions due to tariff disputes. While restrictions on selling advanced chips to China remain, Nvidia continues to advocate for changes to these export controls. Recent optimism regarding trade agreements has positively impacted stock markets, including the S&P 500 reaching new highs.

According to Daniel Ives from Wedbush, "The poster children for the AI revolution are led by Nvidia and Microsoft as both are foundational pieces of building on the biggest tech trend we have seen in our 25 years covering tech stocks on the Street."

He anticipates that more tech giants will soon join Nvidia in the $4 trillion market club, highlighting the ongoing impact of AI on the technology sector.

In his projections, Ives also stated, "Microsoft will hit $4 trillion 'this summer', and then over the next 18 months the focus will be on the $5 trillion … as this tech bull market is still early being led by the AI revolution." His comments reflect the sustained momentum and growth prospects within the industry, driven largely by AI advancements.

(With agency inputs)