Nvidia becomes first company to top $4 trillion in market value

Chip maker's shares rise more than 2% during Wednesday trading before settling at $162.88 a share

Nvidia founder and chief executive Jensen Huang has seen his company benefit from the AI boom. AFP

Nvidia has become the first public company in the world to pass $4 trillion in market capitalisation.

Shares in the chip maker rose as high as 2.8 per cent to $164.42 during Wednesday before settling at $162.88 on market close. Nvidia shares are up more than 18 per cent this year.

The company, based in Santa Clara, California, had passed the $2 trillion mark in February 2024 and the $3 trillion milestone in June.

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“AI revolution and huge historical moment for US tech sector,” Wedbush Securities analyst Dan Ives wrote in a post on X.

Nvidia and other tech giants have been the beneficiaries of an artificial intelligence boom in recent years that has seen US markets reach new record-highs. The S&P 500, of which Nvidia carries a 7.3 per cent weight, topped the 6,200 milestone on June 30. The index was trading 0.19 per cent higher on Wednesday.

While tech giants have seen large gains from the AI boom, none have benefitted like Nvidia. The bellwether has surged to become the most valuable company in the world, surpassing Alphabet, Amazon, Apple and Microsoft.

Amazon, Google and Microsoft all rely on Nvidia's chips to power data centres needed for training AI models and cloud computing services.

Investment in the market is projected to grow even further. A report from the International Data Corporation estimates growth in the AI infrastructure market is poised to surpass $200 billion in spending by 2028.

This comes after companies increased their spending on compute and hardware infrastructure for AI deployments by 97 per cent on an annual basis in the first half of 2024.

The company had reported a first-quarter profit of $18.8 billion this year, shaking off tariff fears, in May. It reported a revenue of $44.1 billion, an increase of 69 per cent from the same time last year.

In May, Nvidia teamed up with Oracle and Open AI to join forces with Abu Dhabi's G42 and establish an AI hub aimed at accelerating the technology's local development.

In March, Nvidia and xAI joined the MGX-backed AI Infrastructrure Partnership that seeks to raise up to $100 billion to enhance the future of AI to develop new data centres. The partnership also seeks to increase the capabilities of existing data centres in the US and elsewhere.

“Countries around the world are recognising AI as essential infrastructure – just like electricity and the internet – and Nvidia stands at the centre of this profound transformation,” chief executive Jensen Huang said on the company's earnings call at the time.

Those earnings came as Nvidia said it had to absorb a $4.5 billion charge because of US export controls on China.

“The $50 billion China market is effectively closed to US industry,” Mr Huang said.

Nvidia is due to report second-quarter earnings next month.