Key points
- Surge driven by high demand for advanced AI processors
- Nvidia’s value nearly eightfold increase since 2021
- More valuable than entire Canadian stock market
- AI optimism fuels stock rebound amid trade deal hopes
ISLAMABAD: Nvidia briefly hit a record market valuation of $3.92 trillion on Thursday, surpassing Apple’s previous all-time high of $3.915 trillion from December 2024. The milestone highlights investor confidence in artificial intelligence (AI) and the key role Nvidia plays in its development.
Shares in the Californian chipmaker rose as much as 2.4 per cent to $160.98 in early trading, before settling at $159.60, giving the company a market value of $3.89 trillion—just shy of Apple’s record. Nvidia’s rapid ascent has been driven by soaring demand for its advanced AI processors, which power the largest and most complex AI models, according to Reuters.
Microsoft is currently the second-most valuable company at $3.7 trillion, followed by Apple with a valuation of $3.19 trillion. The ongoing race among major tech firms—including Amazon, Meta, Alphabet, and Tesla—to build AI data centres has significantly boosted demand for Nvidia’s chips.
AI investment
“Nvidia’s rise to near-$4 trillion shows the extraordinary momentum behind AI investment right now,” said Joe Saluzzi of Themis Trading.
Founded in 1993 by Jensen Huang, Nvidia started as a graphics card manufacturer for gamers but has become central to the AI revolution. Its valuation has risen nearly eight-fold since 2021, when it was worth around $500 billion. The company is now more valuable than the entire stock markets of Canada or Mexico, and all publicly listed companies in the UK.
Despite the rally, Nvidia is trading at a relatively modest 32 times expected earnings for the next 12 months, compared to its five-year average of 41. This suggests that earnings forecasts are rising even faster than the share price.
Future trade deals
The stock has rebounded over 68 per cent since April, when markets dipped due to renewed tariff tensions under President Donald Trump. Optimism around future trade deals has since lifted US equities.
Nvidia now makes up 7 per cent of the S&P 500 index, with it, Microsoft, Apple, Amazon, and Alphabet accounting for 28 per cent of the benchmark.
However, some remain cautious. “AI is a powerful tool, but today’s models may not fully meet the hype,” said Kim Forrest of Bokeh Capital Partners.
Nvidia replaced Intel on the Dow Jones last November, reflecting the industry’s pivot from traditional chipmaking to AI-powered computing.
