Nvidia headquarters, Santa Clara, California.
Nvidia has reached the $4 trillion market capitalisation milestone, becoming the first company in the world to do so, as it outpaces the rest of the “Magnificent Seven” technology companies.
The rise in the chipmaker’s share price – from $10 five years ago to more than $162 now – makes it the world’s most valuable company, underscoring the strong demand for artificial intelligence (AI) chips, as companies race to beat their counterparts in offering advanced applications of the technology.
CompaniesMarketCap.com has tracked Nvidia’s rise since 1999, with its value growing from $550 million at that stage, to $3.97 trillion as of Tuesday morning, South African time. In rand terms, that makes it worth R70.7 trillion.
Nvidia, which saw its shares start to climb rapidly in November 2022, has now overtaken Microsoft ($3.74 trillion), with Apple in third place at $3.15 trillion.
In order of market value, the rest of the so-called “Magnificent Seven” – seven of the world’s biggest and most influential tech companies – are Amazon ($2.36 trillion), Google parent Alphabet ($2.14 trillion), Facebook owner Meta ($1.8 trillion), and Tesla, valued at $959.23 billion.
World Wide Worx MD Arthur Goldstuck says: “Back in January, when Nvidia took a knock after DeepSeek claimed it could train models without graphics processing units, I said the drop was absurd and flagged it as a buying opportunity. Fast forward six months, and Nvidia has smashed through the $4 trillion mark, proving again that in AI, silicon still rules.”
Source: CompaniesMarketCap.com
Mergence Investment Managers chief investment officer Peter Takaendesa comments that the chipmaker’s valuation is based on strong growth over the past few years, as well as expectations this will continue.
He notes that Nvidia doubled its revenue in the previous financial year and is expected to grow earnings on average by 40% annually over the next two years, before slowing to about 10%.
“The shares are largely priced for that level of growth, but there is always room for both material upside and downside surprise for this type of cyclical business.”
Takaendesa adds that other chipmakers, such as Taiwan Semiconductor Manufacturing Company (TSMC), are also seeing a V-shaped bounce back. Nvidia has a manufacturing partnership with TSMC.
Ofentse Dazela, director of pricing research atAfrica Analysis, says Nvidia’s 15-fold gain in value over five years is drivenby its dominance in AI hardware, as well as high-growth areas like AInetworking, data centres, autonomous vehicles and digital twins.
Nvidia’s “high margins and operating efficiency have led to rapid profit growth, attracting significant institutional investment. As the global AI race intensifies, Nvidia remains central to the future of high-performance computing,” Dazela says.
Veteran ICT commentator Adrian Schofield says Nvidia’s success is a case of “right time, right place, right product”. He adds that while history shows such achievements can be fleeting, the outlook for Nvidia remains strong.
Goldstuck, who owns “a very small number” of Nvidia shares, says the driver behind its substantial gains is simple. “Nvidia isn’t selling only chips, but also the proverbial shovels in a once-in-generation gold rush. Every cloud provider, enterprise AI lab and start-up pursuing a competitive edge needs its kit.
“Add in tight control over its software stack and relentless execution, and you get the world’s most valuable company. It may well be a bubble, but equally it is a bottleneck economy, and Nvidia owns the bottleneck,” Goldstuck comments.
Takaendesa adds there is no doubt Nvidia is at the centre of fast computing technology platforms powering data centres and electronic gaming markets. “While more competitors are emerging and there are question marks coming from the low-cost large language model models championed by DeepSeek, Nvidia continues to dominate higher-end AI chips.”
Dazela says Nvidia continues to see strong demand for its graphics processing units to power generative AI models like ChatGPT and Google Gemini. He points out that the company has more than 80% of the data centre AI chip market and has a strong manufacturing relationship with TSMC.
It also has a diverse and loyal customer base that includes cloud giants, governments and research institutions, says Dazela. “Nvidia continues to outpace rivals.”
“The wave of introducing AI to almost every activity under the sun is likely to continue into the next decade. It helps that investors are looking for safe hands, thanks to the uncertainties of the tariff era,” says Schofield.
He adds that, despite some false starts such as Grok, Nvidia is rapidly developing both broad-based and specialist AI products.
