Nvidia Briefly World’s Most Valuable Company

Market Value Milestone

Shares of Nvidia surged 2.4% to $160.98 in Thursday trading, pushing its market valuation to an intraday peak of $3.92 trillion. That milestone briefly eclipsed Apple’s record closing value of $3.915 trillion set in December 2024, marking an unprecedented run toward the $4 trillion threshold. Traders later saw the stock cool to $159.60 by close, leaving Nvidia’s capitalization at approximately $3.89 trillion. Goldman Sachs and other Wall Street banks had already raised their price targets, reflecting unbridled optimism about generative AI workloads.

Microsoft remained the runner-up with a $3.7 trillion valuation after its shares climbed 1.7% to $499.56. Apple held third place, adding 0.8% for a total market cap of $3.19 trillion. Competing giants such as Amazon, Meta, Alphabet and Tesla have been racing to build AI data centers, intensifying the demand for Nvidia’s high-end processors. Wall Street observers view this competition as a primary driver behind Nvidia’s dramatic ascent.

AI Chips Fuel Massive Demand

Nvidia’s latest GPU architectures have excelled at training massive neural networks, winning deals with cloud service providers and enterprise clients. Partnerships with giants like Microsoft Azure, AWS and Google Cloud enable on-demand AI services at scale. These alliances allow capabilities like real-time language translation and large-scale image generation to run more efficiently. Performance improvements have outpaced Moore’s Law expectations, reinforcing the company’s leadership in AI compute. Supply constraints have become an issue, prompting new fab investments and multi-year partnerships to boost chip production.

Meanwhile, the price-to-earnings ratio on forward estimates sits at around 32, below its five-year average of 41, suggesting that revenue forecasts are accelerating faster than the stock bump. Investors have seen Nvidia’s shares rebound more than 68% since an April low amid tariff concerns, as hopes of eased trade frictions gained traction. Concerns over global supply chain disruptions and high power consumption have not deterred spending on AI infrastructure. Corporate spending plans reflect a belief that AI workloads offer a durable return on investment. Environmental pledges by major data center operators, including renewable energy power purchase agreements, have helped alleviate some sustainability concerns.

Scale, Risks, and the Road Ahead

Nvidia now accounts for roughly 7% of the S&P 500 index, while the so-called “Magnificent Seven” tech stocks together represent 28% of the benchmark. That concentration means retirement savers in broad index funds are highly exposed to AI’s trajectory. Kim Forrest, CIO at Bokeh Capital, cautions that large language models may not deliver on lofty hype and could face pullbacks if budget priorities shift. Case in point: DeepSeek’s low-cost AI model earlier this year triggered a brief selloff that reminded investors of the tech sector’s volatility. Founder Jensen Huang has shepherded the company from a niche GPU maker in 1993 to Wall Street’s AI barometer today.

Momentum gained a boost last November when Nvidia replaced Intel on the Dow Jones Industrial Average, symbolizing the semiconductor industry’s AI pivot. Any lasting ascendancy will depend on Nvidia’s ability to maintain a pipeline of cutting-edge chips and navigate emerging regulations around AI ethics and data privacy. Competitors like AMD and Intel are racing to narrow the performance gap, setting up a high-stakes arms race in semiconductor innovation. Investors will be watching quarterly results closely to see if sales of AI data center gear stay on their current blistering pace.