Nvidia achieves historic $4T valuation amidst AI boom
US chipmaker Nvidia made history by becoming the first publicly traded company to reach a $4 trillion market capitalization.
This monumental achievement underscores the surging demand for artificial intelligence (AI) technologies, a trend from which Nvidia has significantly benefited. By 2:00 PM GMT, the company's shares had climbed 2.6%, solidifying its position as the world's most valuable corporation, surpassing tech giants like Apple and Microsoft, both of which had previously reached a $3 trillion valuation.
Founded in 1993, the California-based company has experienced an astonishing growth trajectory in recent years. Nvidia first crossed the $2 trillion mark in February 2024, quickly followed by topping $3 trillion in June, before reaching this latest unprecedented milestone. This rapid ascent is largely attributed to the insatiable demand for its AI processors and specialized gear, especially in the wake of sophisticated AI chatbots like ChatGPT.
Nvidia remains the dominant force in the market for Graphics Processing Units (GPUs), which are indispensable for executing complex AI tasks and developing large language models (LLMs). The intensity of this year's gains is particularly noteworthy, given the significant headwinds the company has faced, including U.S. government-imposed export controls and bans impacting its operations in China.
In recent months, Nvidia has been grappling with a series of restrictions from the US government. In April, the Trump administration enacted additional regulations that halted sales of the company's H20 AI processor, which had been specifically designed to comply with earlier limitations. These geopolitical pressures have had a tangible impact; last month, Nvidia reported a $4.5 billion write-down in inventory and projected an $8 billion hit to sales due to these adjustments. The company is currently operating with the expectation of no sales from the Chinese market.
Despite these challenges, Nvidia's financial performance remains robust. Its May earnings release highlighted a remarkable 69% year-over-year sales growth, predominantly driven by a 73% surge in its data center division.
.png "Advertisement")
