Nvidia's Market Cap Reaches $4 Trillion

Nvidia's Market Cap Surpasses $4 Trillion

Shares of the semiconductor giant have increased by 280% over the last two years due to the AI boom. Nvidia, the chipmaker that powers the artificial intelligence boom, briefly exceeded a $4 trillion market capitalization on Wednesday. This is the highest valuation ever for a publicly traded company.

Shares closed at $162.88 on Wednesday afternoon, a decrease from the intraday high of $164.42. This closing value gave Nvidia a market cap of $3.97 trillion, slightly below its record from earlier that day. Nvidia produces hardware and software for generative AI programs like ChatGPT and has been a major beneficiary of investor demand for this technology. Its size has significantly impacted overall stock market returns in the past two years.

Analyst Views

Morningstar analysts expect Nvidia to maintain its market dominance despite rising competition in the AI sector from companies like Alphabet and Microsoft. According to Morningstar senior equity analyst Brian Colello in May, tech giants will likely seek alternative solutions to reduce their reliance on Nvidia, but these efforts are unlikely to replace Nvidia’s dominance.

Morningstar considers Nvidia fairly valued, with a price to fair value ratio of 1.14, even after its record-breaking rally. Since its IPO in 1999, Nvidia’s returns have surpassed the broader US market, particularly in the last three years following the release of ChatGPT in 2022.

Recent Performance

Over the past two years, the tech giant has returned more than 280%, consistently exceeding expectations. Nvidia’s market cap reached $1 trillion in May 2023 and $3 trillion a little over a year later in June 2024.

Nvidia stock faced challenges in early 2025 when DeepSeek, a Chinese competitor, introduced AI technology with comparable performance at a lower cost, raising concerns about the long-term need for Nvidia’s infrastructure. Additionally, a looming global trade war caused investors to move away from riskier AI investments. However, following a temporary pause in tariffs and renewed confidence in chip demand, Nvidia’s shares have risen by over 25% since the stock market's low point on April 8.

Nvidia surpassed Microsoft to become the world's largest company earlier this summer, while Microsoft’s market cap is near $3.8 trillion. Apple held this position for most of the last decade, reaching a $3 trillion valuation in January 2022. As demand for AI has driven Nvidia to new heights in the last two years, Apple has fallen behind its tech peers due to concerns about its AI progress, slower growth, declining iPhone sales, and regulatory pressures in Europe.

Nvidia’s market cap now exceeds the stock markets of countries like Canada and the United Kingdom. It is slightly smaller than Hong Kong's equities market and about one-third the size of all publicly traded companies in China.

Impact on Market Returns

Nvidia’s growing market cap has made it a significant driver of overall market returns. Nvidia, with a 6.8% weight in the Morningstar US Large-Mid Index, contributed 2.4 of the 11.4 percentage points gained by the index in the second quarter of 2025. Microsoft, the next-largest contributor, added 1.9 points. Nvidia's impact was even greater in the first and second quarters of 2024, contributing 2.3 of the 10.6 points gained in the first quarter and 1.7 of the 4.0 points gained in the second. In the second quarter of 2024, Nvidia accounted for nearly half of the market gains.