Nvidia hits $3 trillion market cap on back of AI boom

Nvidia’s shares rose 5% to $1,224.40 on Wednesday, bringing the company’s market capitalization above $3 trillion for the first time. Investors continue to seek a stake in the company, which is at the forefront of the generative AI revolution.

Nvidia also surpassed Apple to become the second-largest public company after Microsoft.

Nvidia’s achievement is the latest stunning milestone in a run that has seen the stock rise more than 3,224% in the last five years. Later this month, the company plans to split its stock 10-for-1.

In January 2022, Apple became the first US company to reach a market capitalization of $3 trillion during intraday trading. In January 2024, Microsoft’s market value reached $3 trillion. Nvidia, founded in 1993, surpassed the $2 trillion valuation in February, and it only took about three months to reach $3 trillion.

Nvidia reported first-quarter earnings in May, indicating that demand for the company’s expensive and powerful graphics processing units, or GPUs, remained strong. Nvidia reported total sales of $26 billion, more than tripling what it generated a year earlier. Nvidia also exceeded Wall Street’s sales and earnings expectations, forecasting revenue of around $28 billion in the current quarter.

Nvidia’s recent growth has been driven by the tech industry’s demand for its chips, which are used to develop and deploy large AI models like the one at the heart of OpenAI’s ChatGPT.

Google, Microsoft, Meta, Amazon, and OpenAI are spending billions of dollars on Nvidia GPUs.