Nvidia briefly reached a market valuation of $3.92 trillion on Thursday, temporarily positioning it to become the most valuable company in history, as investor enthusiasm for artificial intelligence soared. Shares climbed as much as 2.4% to $160.98, surpassing Apple’s previous record valuation of $3.915 trillion from December 2024. However, the stock later eased slightly, closing with a value of $3.89 trillion—just below Apple’s peak. Nvidia’s cutting-edge AI chips, crucial for training large AI models, have propelled demand for the California-based company’s products. Microsoft followed with a market cap of $3.7 trillion, and Apple at $3.19 trillion, ranking second and third, respectively.

A fierce competition among tech giants like Microsoft, Amazon, Meta, Alphabet, and Tesla to dominate the AI space has fueled skyrocketing demand for Nvidia’s processors. According to Joe Saluzzi of Themis Trading, the race for AI investment is driving market value to unprecedented levels, with Nvidia’s worth rising from $500 billion in 2021 to nearly $4 trillion today—surpassing the combined stock markets of Canada and Mexico, and all public companies in the UK.

Despite its massive gains, Nvidia trades at about 32 times its expected earnings over the next year—lower than its five-year average—reflecting strong earnings growth that has outpaced its share price increases. The company’s shares have rebounded over 68% since April 4, when trade tensions caused market jitters. Optimism around potential trade deals has since lifted U.S. stocks, including Nvidia. Its massive valuation highlights Wall Street’s confidence in AI, with the company now making up 7% of the S&P 500. Alongside Microsoft, Apple, Amazon, and Alphabet, these tech giants represent 28% of the index.

Still, some caution remains. Kim Forrest of Bokeh Capital Partners believes that while AI is productive, current implementations like large language models may not fully meet expectations. Founded in 1993 by CEO Jensen Huang, Nvidia has grown from a gaming hardware maker to a key player in the AI revolution. After a sluggish start to the year due to tariff concerns, its stock regained momentum. Last November, Nvidia replaced Intel on the Dow Jones, marking a pivotal shift in the semiconductor landscape toward AI.