Nvidia hits $4 trillion value as rally notches another milestone

The stock has risen more than 20% in 2025, and is up more than 1,000% since the beginning of 2023. Nvidia now accounts for 7.5% of the S&P 500 Index, near its highest influence on record.

By Ryan Vlastelica and Carmen Reinicke

Nvidia Corp. became the first company in history to achieve a $4 trillion market valuation, cementing its status as a kingpin in the global financial market.

Shares jumped 2.8 per cent to $164.42 on Wednesday to crack the milestone, marking a stunning rebound following a rough start to the year, when spending fears sparked by China’s DeepSeek, along with President Donald Trump’s trade war, weighed on risk sentiment.

The stock has risen more than 20 per cent in 2025, and is up more than 1,000 per cent since the beginning of 2023. Nvidia now accounts for 7.5 per cent of the S&P 500 Index, near its highest influence on record.

The latest catalyst for the stock has been a commitment to AI spending from Nvidia’s biggest customers, showing that demand for its computing systems remains strong. This includes tech giants Microsoft Corp., Meta Platforms Inc., Amazon.com Inc. and Alphabet Inc., who are projected to put about $350 billion into capital expenditures in their upcoming fiscal years, up from $310 billion in the current year, according to the average of analyst estimates compiled by Bloomberg. Those companies account for more than 40 per cent of Nvidia’s revenue.

“There’s obviously tremendous demand” for Nvidia’s chips, said Brian Mulberry, a client portfolio manager at Zacks Investment Management, adding that its products are needed for AI to move to the next stage, something the market has refocused on in the swift rally from April. “It’s been a pretty remarkable 90-day period. There’s no doubt about that.”

Investors have been piling back into the AI trade after a choppy first half of 2025. In January, the emergence of DeepSeek stoked concerns that the heavy spending on AI would soon dwindle, leading shares of Nvidia and other AI plays to plunge. President Trump’s tariff threats in April added to concerns about the global macroeconomic backdrop and led to further selling. Investors, usually swift to buy any dip in Nvidia, rotated out of their highest-flying stocks in favor of defensive sectors.

Nvidia shares took off again in May, when trade talk progress emboldened investors to jump back in to riskier assets after earnings results showed that spending from top customers was full-steam ahead. The chipmaker’s own earnings at the end of the month solidified its pole position in the AI trade, as did comments from Chief Executive Officer Jensen Huang about global industry trends.

The next upcoming catalyst that could propel Nvidia’s shares even higher is the upcoming earnings season, according to Ken Mahoney, president of Mahoney Asset Management.

“What we’re going to see is if the company’s going to beat and raise guidance, like they tend to do often,” he said. He added that Nvidia’s valuation is also currently below its ten-year average, signaling that there is room to run. The stock trades at about 33 times forward earnings.

“You don’t really find it all that expensive when you account for the revenue growth that they have,” Mahoney said. “It’s actually price trying to keep up with earnings growth.”

Wall Street, where nearly 90 per cent of the analysts tracked by Bloomberg have the equivalent of a buy rating on the stock, has long had a bullish view of the company. In addition, the average analyst price target points to upside of a little more than 6 per cent over the coming 12 months.

There are only a handful of companies even remotely close to Nvidia’s $4 trillion status. Microsoft has a roughly $3.7 trillion valuation, while Apple Inc. boasts a valuation of $3.1 trillion.

Apple first touched a $3 trillion market capitalisation in early 2022, the first company to do so. In a sign of how quick Nvidia’s historic rally has been, the chipmaker was valued at about $750 billion at the time. Apple didn’t close above the $3 trillion level until mid-2023, at which point Nvidia was around $1 trillion.

That Apple has largely been range-bound since that milestone is a sign of how even favorite names among traders can turn, according to Brian Buetel, managing director at UBS Wealth Management.

“It is common for investors to fall in love with a few stocks, and it’s great when they do well, but people need to be mindful that it can work the other way,” he said. “It is a real driver of risk and volatility when momentum stocks falter, especially when they’re this influential within indexes.”

Both Alphabet and Amazon top $2 trillion, while Meta rounds out the US members of the trillion-dollar club. Tesla Inc. has been a member, but currently trades below the threshold.