NVIDIA's Rally Hits Another Milestone As Valuation Reaches $4 Trillion

Nvidia Corp. has made history by becoming the first company to reach a $4 trillion market valuation, establishing itself as a dominant force in the global financial landscape. This achievement came after the company’s stock rose 2.8% on Wednesday to close at $164.42.

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The milestone caps a dramatic turnaround for Nvidia, which had a rocky start to the year due to concerns about reduced AI spending linked to China’s DeepSeek project and renewed global trade tensions stemming from President Donald Trump’s tariff threats.

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Despite those early setbacks, Nvidia’s stock has surged over 20% so far in 2025 and has skyrocketed more than 1,000% since the beginning of 2023. The company now comprises 7.5% of the S&P 500 Index, placing it among the most influential members of the benchmark, close to its highest-ever weighting.

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The most recent boost for Nvidia came from increased AI-related spending by its biggest customers. Major tech firms like Microsoft, Amazon, Alphabet (Google’s parent company), and Meta have signaled their intention to raise capital expenditures to roughly $350 billion in the coming fiscal year, up from about $310 billion. These companies collectively generate over 40% of Nvidia’s revenue, further highlighting the chipmaker’s central role in powering their AI ambitions.

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Brian Mulberry, a client portfolio manager at Zacks Investment Management, emphasized the importance of Nvidia’s technology, noting that demand remains intense. “There’s obviously tremendous demand,” he said. “These chips are essential for advancing AI to the next level.” He also remarked on the impressive recovery Nvidia has made over the past few months, describing it as a “remarkable 90-day period.”

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Investors are once again flocking to AI-focused companies after a volatile first half of 2025. In January, concerns that AI investment might slow due to the emergence of China’s DeepSeek caused Nvidia and other AI stocks to slump. The situation worsened in April when President Trump’s aggressive trade policies raised fears about global economic conditions, pushing investors toward safer assets and away from high-growth tech names.

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Nvidia’s fortunes turned around in May. Positive developments in trade talks boosted investor confidence, prompting a return to riskier tech investments. Strong quarterly earnings reports from Nvidia's key customers reassured markets that AI spending wasn’t slowing down. Then, Nvidia’s own earnings at the end of May reinforced its leadership in the AI chip sector. CEO Jensen Huang’s commentary about broader AI trends added further fuel to the rally.

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Looking ahead, the upcoming earnings season could provide another boost to Nvidia’s stock. Ken Mahoney, president of Mahoney Asset Management, expects the company to continue its trend of outperforming expectations and raising guidance.

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He also pointed out that Nvidia’s current valuation—about 33 times forward earnings—is below its 10-year average. “When you factor in their explosive revenue growth, the stock actually looks reasonably priced,” Mahoney said. “It’s just a matter of the price keeping pace with earnings.”

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Wall Street remains overwhelmingly positive on Nvidia. Nearly 90% of analysts tracked by Bloomberg rate the stock a buy, and the average price target suggests about 6% further upside over the next 12 months. Analysts continue to see Nvidia as a core holding in AI and tech portfolios.

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There are very few companies operating in Nvidia’s valuation neighborhood. Microsoft, for instance, is valued at around $3.7 trillion, while Apple’s market cap stands at $3.1 trillion. Apple was the first to reach a $3 trillion valuation back in early 2022. At that time, Nvidia was worth just $750 billion. Apple didn’t maintain a closing value above that level until mid-2023, when Nvidia reached $1 trillion.

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Brian Buetel, managing director at UBS Wealth Management, pointed out how Nvidia’s rapid rise contrasts with Apple’s more stagnant trajectory since reaching its own major milestone. “It’s common for investors to become enamored with a few favorite stocks,” Buetel said. “But they need to remember that momentum can shift, and when stocks this large pull back, it adds considerable risk and volatility to the broader market.”

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Alongside Nvidia, other members of the trillion-dollar club include Alphabet and Amazon, both with valuations exceeding $2 trillion, and Meta Platforms, which also recently joined the group. Tesla, which once reached a trillion-dollar valuation, is currently trading below that level.

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Nvidia’s journey to $4 trillion has redefined what’s possible in the stock market, demonstrating how a company at the forefront of transformative technology—like artificial intelligence—can achieve unprecedented financial success in a short span of time.

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