NVIDIA becomes first company to cross $4.5 trillion market valuation
What's the story
NVIDIA has once again broken records on Wall Street, becoming the first company in history to surpass a $4.5 trillion market capitalization. The chipmaker's shares rose nearly 3% on Tuesday, ending at an all-time high of $186.58 per stock. This marks a growth of 2.6% from the previous day and takes its year-to-date gains to about 39%.
Growth trajectory
NVIDIA crossed the $1 trillion mark in May 2023
NVIDIA's market capitalization has seen an exponential rise over the last two years. The company crossed the $1 trillion mark in May 2023, hit $2 trillion in February 2024, reached $3 trillion in June 2024, and surpassed $4 trillion in July this year. Now, with a market cap of over $4.5 trillion, NVIDIA continues to attract investor interest as it strengthens its foothold in the artificial intelligence (AI) sector.
AI expansion
Strategic investments and partnerships in AI driving NVIDIA's growth
The recent surge in NVIDIA's market cap can be attributed to its strategic investments and partnerships in the AI space. Last week, OpenAI announced that NVIDIA would take up to $100 billion in equity and invest in building massive data centers powered by its GPUs. This comes as part of a broader context of AI infrastructure development, which includes the $500 billion "Stargate" project involving five large-scale data centers with Oracle.
Market influence
CEO Jensen Huang highlights NVIDIA's dominance in AI infrastructure
NVIDIA's products account for nearly 70% of the capital invested in building new AI data centers, according to CEO Jensen Huang. This highlights the company's dominant position in the market and its crucial role in facilitating infrastructure development for AI technologies. Other tech giants such as Meta and Google are also ramping up their infrastructure investments, further driving demand for NVIDIA's products.
Infrastructure deal
CoreWeave's deal with Meta boosts NVIDIA's prospects
In a major development, CoreWeave, a cloud provider partly owned by NVIDIA, has signed a $14.2 billion deal to provide AI infrastructure services to Meta. This further underscores the growing demand for NVIDIA's products and services in the AI sector. Citi analysts have also raised their price target for NVIDIA from $200 to $210, citing an increased outlook for AI infrastructure spending after OpenAI's recent announcements.