TLDR
- Nvidia became the first publicly traded company to reach a $4 trillion market value on Wednesday, surpassing Microsoft and Apple
- Stock closed at a record high and continued rising in premarket trading on Thursday, up 0.7% to $163.94
- Shares have surged 51% over the past three months and are up 21% year-to-date driven by AI demand
- Company weathered concerns about DeepSeek’s cheaper AI training methods and China export restrictions
- Nvidia plans to launch a new AI chip designed specifically for China, with CEO Jensen Huang potentially meeting Chinese leaders next week
Nvidia stock extended its record-breaking rally on Thursday morning after the chipmaker became the first publicly traded company to reach a $4 trillion market value. The milestone marked another chapter in the company’s remarkable journey powered by artificial intelligence demand.
Shares climbed 0.7% to $163.94 in premarket trading on Thursday. This put the company on track to open above the $4 trillion mark once again. The stock closed Wednesday at a record high of $162.88, representing a nearly 2% gain for the day.
The achievement pushed Nvidia past tech giants Microsoft and Apple in market value. Apple previously held the record with a $3.915 trillion closing value reached in December 2024. Nvidia’s closing market cap on Wednesday reached $3.97 trillion.
The stock has delivered impressive returns across multiple timeframes. Shares have surged 51% over the past three months alone. Year-to-date performance shows gains of 21%, while the 12-month return stands at 24%.
Nvidia’s dominance stems from its specialized chips and software platform designed for AI applications. The company’s graphics cards and CUDA software handle both training and running AI programs. This gives Nvidia a strategic advantage over competitors like AMD and Intel.
AI Spending Boom Drives Demand
Major tech companies continue pouring money into Nvidia’s hardware. Amazon, Google, Meta, Microsoft, and Tesla are spending hundreds of billions of dollars on data center buildouts. These investments support cloud-based AI offerings and internal AI model development.
The AI revolution began with OpenAI’s ChatGPT launch in 2022. Since then, generative AI has created massive demand for Nvidia’s specialized processors. Companies need powerful chips to train large language models and run AI applications.
Nvidia weathered several challenges this year that tested investor confidence. The company faced a $600 million market cap hit in January after DeepSeek revealed its R-1 model. DeepSeek claimed it trained the model using less expensive chips than Nvidia’s top-tier offerings.
Wall Street initially panicked over concerns that Nvidia’s expensive data center chips were losing relevance. Fears also emerged that the AI industry was shifting from training models to inference applications. Some believed this transition would reduce demand for Nvidia’s most powerful processors.
Export Restrictions Create Headwinds
Both concerns proved unfounded as the AI market continued evolving. Nvidia’s chips remain among the best for training AI models. The industry has also shown that inference applications benefit from more powerful processors for handling complex questions.
The company has also benefited from sovereign AI growth. This involves countries building their own AI data centers rather than relying on foreign services. Nvidia expects to supply hundreds of thousands of chips to Saudi Arabia and European nations.
Export restrictions to China created another challenge for Nvidia. The company took a $4.5 billion hit in its most recent quarter due to these bans. Management anticipates a larger $8 billion writedown in the current period.
Despite these headwinds, Nvidia’s stock price continues climbing. The company is working on solutions to maintain its China business within regulatory constraints. Reports suggest Nvidia plans to launch a new AI chip designed specifically for the Chinese market.
CEO Jensen Huang may meet with Chinese leaders next week to discuss the new chip. The Financial Times reported that this involves a modified version of Nvidia’s Blackwell graphics processing units. The alterations would comply with current export regulations.
The broader AI market shows no signs of slowing down. Tesla CEO Elon Musk’s startup xAI launched its new chatbot Grok 4 on Thursday. This development highlights the rapid pace of AI innovation driving demand for Nvidia’s products.
Nvidia is preparing to release its next-generation Blackwell Ultra chips with no serious competitor currently in sight.
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