Nvidia Hits $4 Trillion Value on AI Dominance - Nasdaq Hits Record High

Jensen Huang, Nvidia CEO

Nvidia briefly soared to a historic market capitalization of $4.5 trillion on Wednesday, setting a new global record and becoming the first company ever to reach this valuation. Although its value later settled at approximately $3.97 trillion, just shy of the $4 trillion mark, the moment solidified Nvidia’s place among the most powerful and influential companies on Wall Street.

Stock Surge Underscores AI Dominance

The 1.80% gain in Nvidia’s share price on the day reflected a wave of investor confidence, pushing its valuation close to the $4 trillion threshold. This market rally showcases Wall Street’s strong belief in Nvidia’s central role in the accelerating development of artificial intelligence. The company’s high-performance chips have become foundational to AI infrastructure worldwide, positioning Nvidia as a key driver of the sector’s future growth.

Rapid Ascent in Market Value

Nvidia first reached the $1 trillion mark in June 2023, and its climb to nearly $4 trillion has taken just over a year, outpacing tech giants like Apple and Microsoft, which took longer to achieve similar valuations. This meteoric rise further highlights Nvidia’s dominant position in the semiconductor industry and its explosive relevance in the AI boom.

Microsoft Trails as Second Most Valuable

While Nvidia leads the valuation race, Microsoft remains the second-most valuable publicly traded U.S. company, with a current market cap of around $3.74 trillion. Nvidia’s inclusion in the elite "trillion-dollar club" was cemented with Wednesday’s 1.4% rise in its stock, which closed at $503.51.

Broader Market Gains Fueled by Nvidia Rally

The tech sector’s momentum helped drive major U.S. indices higher. The Nasdaq Composite jumped 192.87 points, or 0.9%, to a record closing level of 20,611.34. The S&P 500 followed with a 0.6% gain to reach 6,263.26, while the Dow Jones Industrial Average climbed 217.54 points, or 0.5%, ending the day at 44,458.30. Nvidia played a leading role in this surge, with its strong performance lifting market sentiment across the board.

Sectoral Winners and Losers

Housing-related stocks posted some of the day’s biggest gains. The Philadelphia Housing Sector Index surged 2.9%, reaching its highest close in over four months. Gold stocks also rallied, with the NYSE Arca Gold Bugs Index climbing 1.9%. Biotechnology and utility stocks posted strong performances as well. However, oil service stocks saw a decline, reversing some of their earlier gains. The Philadelphia Oil Service Index dropped 1.1% on the day.

Mixed Results in Global Markets

Asian markets delivered a mixed performance. Japan’s Nikkei 225 edged up 0.3%, while China’s Shanghai Composite slipped by 0.1%. The Hang Seng Index in Hong Kong saw a steeper decline of 1.1%. European markets, in contrast, ended the day higher. The U.K.’s FTSE 100 inched up 0.2%, while both Germany’s DAX and France’s CAC 40 rose by 1.4%, bolstered by broad-based optimism.

Treasuries Rebound as Yields Fall

In the bond market, U.S. Treasuries rebounded after several sessions of weakness. Yields on the benchmark 10-year note fell significantly, dropping by 7.3 basis points to 4.34%. The move reflects renewed investor interest in safer assets amid broader market fluctuations and a patient stance from the Federal Reserve on future rate changes.

Trade Optimism Adds Fuel to Rally

Optimism surrounding new trade agreements and closer alignment between the U.S. and its global partners has added to the bullish sentiment in recent weeks. This environment of cooperation has helped lift major indexes like the S&P 500 to record levels. Nvidia now accounts for roughly 7.3% of the S&P 500’s total weight, making it the index’s most influential stock, surpassing Apple at around 7% and Microsoft at 6%.