Nvidia's market capitalization reached $4 trillion for the first time during trading on July 9 The developer of high-performance AI chips became the world's first public company whose market value crossed that level, noted Reuters.

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In trading on July 9, Nvidia's shareswere up 2.7% to $164.4 apiece at one point. That marked their new all-time high and allowed the AI chip developer to cross the $4 trillion mark in market value for the first time. Nvidia became the world's first publicly traded company to cross that level, reports Reuters.

Then, however, Nvidia's stock slowed to a 2% gain and its market value fell back below $4 trillion to about $3.98 trillion.To end the day at the $4 trillion mark, the company's stock would have to close at or above $163.93, notes Barron's, citing Dow Jones Market Data. But even if Nvidia fails to end trading at that mark, the company will still remain the most valuable in the world. Nvidia's capitalization exceeds the combined value of the stock markets in Canada and Mexico, Reuters notes, citing LSEG data. It first reached a market value of $1 trillion in June 2023 and tripled it in just one year - faster than Apple and Microsoft, two other companies that have broken the $3 trillion barrier. Microsoft is now second only to Nvidia in market value (about $3.75 trillion);

Investors continue to buy up Nvidia securities amid the artificial intelligence boom, notes Reuters. They have become one of the most popular on Wall Street, emphasizes the agency. Thus, since April, Nvidia shares have risen by about 74%, recovering from the fall caused by Donald Trump's trade policy. Since the beginning of the year, the company's shares are in plus by almost 22%. By comparison, the main U.S. stock index, the S&P 500, has added about 6% over the same period. Nvidia accounts for a record 7.3% of the S&P 500 index - more than any other company. By comparison, Apple has about 7% and Microsoft about 6%.

What does that mean

"This is a historic moment for Nvidia, a demonstration of the strength of the tech sector and evidence that the AI revolution is entering a new phase of growth," said Wedbush analyst Dan Ives, known for his optimistic outlook on the tech sector.

Nvidia's booming capitalization reflects Wall Street's confidence in the rapid development of AI, Reuters writes. All the big tech players - OpenAI, Amazon and Microsoft - are in the race to build massive data centers to support the AI revolution, notes NBC News. And they're all using Nvidia chips for their services.

"The demand for Nvidia chips is certainly enormous," noted portfolio manager at Zacks Investment Management Brian Mulberry. He said the company's products are essential to taking AI to the next level - and that's what the market has been focusing on during the rapid rally since April. "It's been a truly amazing 90 days - there's no doubt about that," Mulberry added.

The next potential catalyst for Nvidia shares to rise will be the corporate reporting season, according to Ken Mahoney, president of Mahoney Asset Management. "Let's see if the company manages to beat expectations and raise guidance - as it does regularly," he told Bloomberg. Nvidia shares don't look overvalued right now and still have upside potential, he said. Still, Mahoney warned of risks as well. "Investors often fall in love with individual securities - and that's great as long as things are going well. But it's important to remember that the opposite can happen," he noted. - When growth stocks lose momentum, especially those so influential in indexes, it becomes a source of serious risk and volatility."

This article was AI-translated and verified by a human editor

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