TLDR
- Nvidia stock closed above $4 trillion market cap for the first time, gaining 0.75% to $164.10
- The $4 trillion valuation equals about 3.6% of global GDP, far exceeding Cisco’s dot-com peak of 1.6%
- Shares have surged over 50% in three months, driven by continued AI demand and market recovery
- CEO Jensen Huang may meet Chinese leaders next week to discuss modified Blackwell chips for China
- Company expects $8 billion writedown from China export restrictions but stock continues climbing
Nvidia closed above the $4 trillion market cap milestone for the first time Thursday, marking a historic achievement for the chipmaker. The stock gained 0.75% to $164.10, ending the day with a market cap of $4.004 trillion.
This came just one day after Nvidia became the first U.S. company to hit $4 trillion on an intraday basis. The achievement puts the company in uncharted territory for publicly traded firms.
The numbers tell a striking story about the company’s rapid ascent. Shares have surged more than 50% over the past three months alone.
This rally has helped lead the broader market’s recovery from April’s selloff. The gains followed President Donald Trump’s “Liberation Day” tariff announcement that initially spooked investors.
To put the $4 trillion figure in perspective, Bleakley Financial Group CIO Peter Boockvar noted it equals about 3.6% of global GDP. During the dot-com bubble peak in March 2000, Cisco Systems reached a $550 billion market cap that represented just 1.6% of global GDP.
The comparison highlights just how massive Nvidia’s valuation has become. Boockvar emphasized his comments were “just a comparison” rather than an opinion on the stock.
AI Demand Fuels Continued Growth
The chipmaker continues riding the wave of generative AI hype that began with OpenAI’s ChatGPT launch in 2022. Major tech companies are spending hundreds of billions on Nvidia’s hardware as they build AI data centers.
Amazon, Google, Meta, Microsoft, Tesla and others are all major customers. They need Nvidia’s chips to train AI models and run cloud-based AI services.
The company’s stock price is up around 21% year to date and 24% over the past 12 months. Nvidia’s chips and CUDA software platform give it a strategic advantage that rivals AMD and Intel struggle to match.
Tesla CEO Elon Musk’s xAI startup launched its new chatbot, Grok 4, on Thursday. This development underscores how quickly the AI space continues evolving.
China Export Restrictions Create Challenges
Nvidia faces headwinds from U.S. export restrictions to China. CEO Jensen Huang warned these curbs could hit sales by $15 billion.
The company took a $4.5 billion hit to its bottom line in its most recent quarter due to the ban. It anticipates a larger $8 billion writedown in the current period.
Despite these challenges, Nvidia’s stock price continues climbing. The company is planning to launch an AI chip designed specifically for China, according to reports.
Huang could meet with Chinese leaders next week to discuss the plans. The Financial Times reported he may present a version of Nvidia’s Blackwell graphics processing units altered to fit new regulations.
The modified chips would comply with export restrictions while still serving the Chinese market. This could help offset some of the revenue impact from the trade limitations.
Other chip stocks showed mixed performance Thursday. Advanced Micro Devices gained 4.2% while Broadcom slipped 0.9%.
Earlier this year, Nvidia’s stock experienced volatility when DeepSeek revealed its R-1 model. The Chinese company claimed it trained the model using less powerful chips, sparking concerns about demand for Nvidia’s premium processors.
Wall Street initially panicked over fears that expensive data center chips were falling out of favor. Some worried the AI industry was shifting from training models to simply using them.
Both concerns have proven largely unfounded. Nvidia’s chips remain among the best for training AI models, and the industry has shown that running AI models also benefits from more powerful processors.
The company has also benefited from sovereign AI growth. Countries want 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 countries. This sovereign AI trend provides another growth avenue beyond traditional tech company customers.
With next-generation Blackwell Ultra chips on the horizon and no clear competitor in sight, Nvidia appears positioned for continued growth. The company is planning to launch chips designed specifically for China according to a Financial Times report citing people with knowledge of the plans.
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