With AI, Nvidia Sets New Records, Reclaiming Largest Stock Title

Nvidia Corp. surged to a new record high on Wednesday, solidifying its place as a dominant force in the global stock market and a central player in the artificial intelligence (AI) revolution. Shares climbed 4.3% to close at $154.31, surpassing the company’s previous peak set in January. This latest milestone adds to a stunning rally that has lifted Nvidia's stock by 63% since its April low, tacking on nearly $1.5 trillion in market value.

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With this most recent gain, Nvidia has become the most valuable publicly traded company in the world, boasting a market capitalization of approximately $3.77 trillion. This move pushes it past Microsoft Corp., whose market value stands at about $3.66 trillion.

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The company’s latest quarterly earnings have been a strong catalyst for this upward momentum. Nvidia’s results highlighted exceptional growth and signaled further strength ahead, even amid regulatory restrictions on selling advanced AI chips to China.

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Meanwhile, earnings reports from Nvidia’s major customers — including Microsoft, Meta, Alphabet, and Amazon — reinforced optimism, showing those tech giants continue pouring resources into expanding their AI capabilities. Combined, these four companies make up more than 40% of Nvidia’s revenue, according to Bloomberg’s supply chain analysis.

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Michael Smith, a co-portfolio manager at Allspring Global Investments, said his conviction in Nvidia’s long-term trajectory has only grown. “I’m more confident in Nvidia’s growth now than I was a few months ago. The AI arms race looks like it’ll continue at least through 2025, maybe even 2026,” he said. “The stock’s momentum is back, and Nvidia’s competitive advantage — its moat — has only expanded, reinforcing its leadership.”

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During the company’s annual shareholder meeting on Wednesday, CEO Jensen Huang addressed investor concerns and reaffirmed his belief in the strong and sustained demand for AI technologies. He emphasized that the computing world is still in the early stages of a sweeping transformation driven by AI infrastructure upgrades — a trend Nvidia is positioned to lead.

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Just a few years ago, Nvidia was a niche company best known to gamers and graphics professionals. Today, it has become one of the most influential companies on Wall Street, widely viewed as a bellwether for the broader AI movement. The company’s stock is already up 15% this year, following a massive 170% gain in 2024 and an even more impressive 240% surge in 2023.

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Despite its meteoric rise, Nvidia still appears reasonably valued by several key metrics. The stock is currently trading at around 31.5 times expected earnings over the next 12 months, which is below its 10-year average. It also compares favorably to the broader Nasdaq 100 Index, which trades at a multiple of 27. Analysts see Nvidia’s growth far outpacing most other tech companies, helping to justify the premium.

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Another commonly cited metric, the PEG ratio — which measures price relative to expected earnings growth — stands at just 0.9 for Nvidia, the lowest among the so-called “Magnificent Seven” tech giants. This signals that despite its size, Nvidia offers both high growth potential and a reasonable price tag, a rare combination that keeps Wall Street bullish.

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According to data compiled by Bloomberg, nearly 90% of analysts rate Nvidia as a “buy,” and the stock still trades about 12% below the consensus price target. This suggests that many believe the rally has room to continue.

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Interestingly, even with its strong performance, Nvidia remains relatively under-owned among institutional investors when compared to its tech peers. Bank of America reports that just 74% of long-only funds hold Nvidia, compared to 91% for Microsoft, the most widely held tech stock, and higher ownership rates for Amazon and Apple as well. This leaves room for additional inflows from money managers who may look to increase their exposure.

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Michael Smith added a note of caution, though. “I’m optimistic about this year and the next, but like everyone else, I don’t have a clear picture beyond that,” he said. “The stock isn’t overpriced, but when you’re one of the largest companies on the planet, there’s only so much upside left. The key variable is how long customers keep spending aggressively on AI. If that slows, even slightly, Nvidia’s stock could experience significant swings.”

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Ultimately, Nvidia’s continued rise will depend on whether the AI boom maintains its current pace — and whether Nvidia can keep evolving fast enough to meet the insatiable demand of its customers.

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