Nvidia Hits $4 Trillion, Leads the AI Race

Nvidia touched $4 trillion in market capitalization on Wednesday — four trillion in US usage — becoming the first publicly traded company to reach that valuation. Its shares rose as much as 2.5 percent to an all-time high of $164.

The milestone puts the company ahead of Microsoft, which was valued at around $3.75 trillion at the time, and Apple. But its significance goes beyond the market-cap rankings: Wall Street is valuing Nvidia as the leading supplier of the physical infrastructure needed to deploy artificial intelligence models at scale.

From making graphics to selling AI capacity

Nvidia does not manufacture its chips directly; it designs them. For years, the company was best known for its gaming graphics cards. That specialization proved decisive when researchers and businesses began using GPUs — processors capable of carrying out many operations simultaneously — to train neural networks.

Today, its H100 and H200 accelerators have become standard components in AI-focused data centers. The new Blackwell generation, unveiled in March 2024, is expected to take over as the next platform. Major cloud providers and technology companies buy these systems to train and run models such as conversational assistants, image generators and programming tools.

The demand is reflected in the company’s results. Nvidia reported $44.1 billion in revenue in its fiscal first quarter of 2026, up 69 percent from a year earlier, according to results published in May. Of that total, $39.1 billion came from its data-center division. For the current quarter, the company forecast revenue of $45 billion, plus or minus 2 percent.

A swift recovery after DeepSeek and tariffs

The path to $4 trillion has not been linear. In late January, the emergence of DeepSeek, a Chinese company that said it had developed a competitive model at a lower training cost, raised questions about whether spending on AI chips could slow. Nvidia then suffered a record one-day drop in market value.

Announcements on tariffs by Donald Trump and US restrictions on exports of certain advanced chips to China also weighed on the company in the spring. Nvidia estimated that new limits on its H20 chip would cost it around $8 billion in revenue during the fiscal second quarter.

Even so, the stock has recovered about 74 percent from its April lows and is up more than 22 percent so far this year. The rebound has coincided with new highs for the S&P 500 and expectations that the United States will reach trade agreements with some partners.

A company that now moves the index

Nvidia’s size has a direct impact on the market. The company accounts for 7.3 percent of the S&P 500, the index’s largest individual weighting, according to LSEG data cited by Reuters. Microsoft and Apple account for around 6 percent and 7 percent, respectively. A significant move in Nvidia’s share price can, by itself, influence the performance of the main US stock index.

Its valuation also exceeds the combined value of the Canadian and Mexican stock markets, as well as that of all publicly listed companies in the United Kingdom. Even so, the market is not assigning the stock higher multiples than in recent years: Nvidia trades at roughly 32 times projected earnings for the next 12 months, compared with a three-year average of 37 times. That suggests the sharp increase in revenue has kept pace with the rise in the stock price.

The next test will come on August 27, when Nvidia reports its second-quarter results. The question is no longer whether AI requires vast amounts of computing power — current figures suggest that it does — but how long major technology companies will maintain this level of investment and whether Nvidia can preserve its lead over competitors such as AMD and the proprietary chips developed by cloud providers.