Nvidia has become the first company to reach a $US4 trillion market valuation, solidifying its dominant position in the global financial landscape. Shares of the company surged 2.8 per cent to $US164.42 in New York on Wednesday, marking a significant recovery after a turbulent beginning to the year. Nvidia specialises in designing and manufacturing graphics processing units (GPUs). These GPUs are essential for high-performance computing and artificial intelligence applications.
The stock’s resurgence is fuelled by substantial commitments to AI spending from Nvidia’s major clients, including tech giants like Microsoft, Meta, Amazon, and Alphabet. These companies are projected to invest approximately $US350 billion in capital expenditures in their upcoming fiscal years, a notable increase from the $US310 billion spent in the current year. According to Bloomberg analysis, these tech giants account for over 40 per cent of Nvidia’s total revenue.
Investor confidence in the AI sector has been rekindled after a shaky first half of 2025. Concerns about potential declines in AI spending, initially sparked by China’s DeepSeek, led to a dip in Nvidia’s stock earlier this year. However, progress in trade discussions and strong earnings reports demonstrating continued investment from top customers have propelled the stock upward since May. Nvidia’s CEO, Jensen Huang, has further bolstered investor sentiment with positive commentary on global industry trends.
Looking ahead, the upcoming earnings season could serve as another catalyst for Nvidia’s continued growth, according to Ken Mahoney, president of Mahoney Asset Management. Wall Street remains largely optimistic about Nvidia’s prospects, with nearly 90 per cent of analysts tracked by Bloomberg holding a buy rating on the stock. The average analyst price target suggests further upside potential of just over 6 per cent in the next 12 months, signalling continued confidence in the company’s trajectory.
