Shares of the California-based firm rose 2.5% in early trading on Wednesday morning, briefly pushing its stock price above $164 and securing its place at the top of global equity markets.
The milestone comes just over a year after Nvidia first breached the $1 trillion mark in May 2023 and highlights its meteoric rise amid the artificial intelligence boom.
Nvidia's valuation has surged eightfold since 2021, when it was valued at just $500 billion. The company crossed the $2 trillion threshold in February 2024 and hit $3 trillion in June before this week's record-breaking leap. It now carries the most weight on the S&P 500, with its performance acting as a bellwether for global tech stocks.
Founded in 1993 and long known for its graphics processing units (GPUs) popular among gamers, Nvidia has become the dominant force behind the AI revolution. Its high-powered chips are essential to the data centres powering large language models, cloud computing, and generative AI platforms operated by tech giants including Microsoft, Amazon, Meta, and Alphabet.
In its most recent earnings report, Nvidia posted a 69% year-over-year revenue increase to $44.1 billion, with profits soaring to $18.8 billion despite challenges from tariffs and export restrictions. The company is set to report second-quarter results next month, with analysts predicting another record-setting quarter.
Nvidia's rapid ascent reflects a broader shift in investor priorities, with artificial intelligence now seen as the most transformative economic force of the decade. According to IDC, global spending on AI infrastructure is projected to exceed $200 billion by 2028.
CEO Jensen Huang has become one of the world's richest individuals, with Bloomberg pegging his net worth at $140 billion. Huang has also gained political visibility, recently joining President Donald Trump on a high-profile trip to Saudi Arabia to promote Project Stargate, a $500 billion AI infrastructure initiative backed by Nvidia.
Despite its dominance, Nvidia faces competition and geopolitical challenges. Chinese startup DeepSeek rattled markets earlier this year with a rival AI model that raised questions about the long-term need for expensive hardware. The U.S. government's export restrictions on Nvidia's H20 chips to China have also weighed on performance, costing the company an estimated $2.5 billion in revenue last quarter.
Nevertheless, the company has rebounded stronglyâ€"its stock is up nearly 74% since Aprilâ€"thanks to robust demand and continued AI adoption across industries.
Wycliffe Nyamasege
