Nvidia has officially become the world’s first company to reach a market value of $4 trillion, moving past tech giants Apple and Microsoft.
Nvidia (NVDA) has become the first company in history to reach a market capitalization of $4 trillion. Shares climbed 2.4% to $164 on Wednesday, as the leading chipmaker continues to benefit from surging global AI demand.
The US-based company has overtaken technology giants Apple and Microsoft as the world’s largest corporation. It first reached a market value of $1 trillion back in June 2023, and has continued to rise rapidly since.
So far this year, Nvidia’s stock price has increased around 22% and over the past 12 months it is up 24%. It has been a remarkable few years of growth for the company. Back in 2017, its shares were worth less than 1% of the current price.
How has Nvidia become the world’s most valuable company?
Nvidia has profited from overwhelming market demand for generative AI, which began in 2022 with the introduction of OpenAI’s ChatGPT. The company’s chips are regarded as among the best for training AI models, a key factor behind its huge success.
It has a strategic advantage over rivals AMD and Intel because its chips, modified graphics cards, and CUDA software platform are designed to both train and run AI programs. This has led to lucrative deals with industry giants like Amazon, Google, Meta, Microsoft, and Tesla.
These global tech corporations are each spending hundreds of billions of dollars on the company’s hardware. Nvidia’s products form a key part of ongoing plans to construct the data centres required to provide cloud-based AI offerings to their customers and create their own internal AI models.
How has artificial intelligence driven Nvidia’s success?
Sovereign AI has played a major role in fuelling Nvidia’s success. This is where countries use AI data centres to power their own AI services rather than rely on those abroad. As the technology has developed, the industry has found that faster AI chips lead to better question answering.
The company’s strong reputation is due to its impressive product offering, with demand for Nvidia chips continuing to grow. The firm has plans to supply hundreds of thousands of chips to countries such as Saudi Arabia and across Europe.
At the same time, Nvidia has managed to overcome US government bans on the sales of its chips to China. Despite the company taking a $4.5 billion hit to its bottom line in its most recent quarter, its stock price has consistently climbed.
With the chipmaker due to release its next-generation Blackwell Ultra chips shortly, it could be on track to continue this impressive growth. Combined with the lack of major competitors currently on the market, there appears to be no limit to Nvidia’s potential success right now.
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