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Nvidia is the first $4-trillion company. Here are three things to know

BBG News

SAN FRANCISCO – Nvidia stands as the most valuable corporation globally, largely due to its significant gains from the worldwide surge in Artificial Intelligence technology.

This week, the Santa Clara-based chip maker got another windfall.

On Monday, Nvidia, headed by Jensen Huang, was given permission by the U.S. government to sell certain AI chips in China, causing its stock price to rise by 4% to $170.70 per share on Tuesday. AMD Inc., a major competitor, has also received similar clearance from the government.

Over the past two years, I’ve witnessed an incredible surge in Nvidia’s valuation, particularly since generative artificial intelligence took center stage. Just last week, this 32-year-old company made history by becoming the first publicly traded firm to reach a staggering $4 trillion market capitalization, outpacing tech giants like Microsoft and Apple.

While the achievement is mainly symbolic, it significantly heightened the level of rivalry in the artificial intelligence sector. This area, brimming with vast investments from tech giants and new venture capitalists, now finds itself in a more competitive landscape.

When a company reaches such a high market value, everyone, even the average person, wants to emulate its success,” explained Rob Enderle, an analyst from Enderle Group. “This means there will be intense efforts to develop technologies that rival Nvidia’s, as it appears highly profitable.

Nvidia plays a crucial role in the expansion of Artificial Intelligence (AI) technology, given that numerous AI applications are constructed using Nvidia’s processors.

Before the AI revolution, Nvidia was primarily recognized for manufacturing top-tier graphics cards, a favorite among gamers due to their ability to generate swift visuals. However, in recent times, the company has gained notoriety for selling potent chips that enable chatbots like OpenAI’s ChatGPT and autonomous vehicles to process information rapidly enough for practical application. In its 2025 annual report, Nvidia stated that it powers over 75% of the supercomputers on the TOP500 list, a ranking system that showcases the 500 most powerful computer systems worldwide.

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The Silicon Valley-based semiconductor company, Nvidia, has soared during the artificial intelligence (AI) boom, momentarily surpassing Microsoft and Apple in market value, making it the globally recognized leader in terms of worth.

What is powering Nvidia’s rise?

Founded in 1993, Nvidia has ridden many technology waves, including the crypto frenzy.

In recent times, Nvidia has experienced significant expansion due to global investor enthusiasm and the competitive race for leadership in artificial intelligence.

Businesses are keen to discover ways AI can streamline procedures and tackle intricate issues. However, acquiring the necessary computational power for AI can prove costly when companies opt to construct their own hardware. This is where Nvidia enters the picture.

In the initial three months of its financial year, Nvidia recorded an impressive 69% surge in sales, reaching approximately $44.1 billion. The company’s net earnings also saw a significant boost, increasing by almost 26% to around $18.8 billion compared to the same period last year. Looking ahead to its fiscal year 2025, Nvidia anticipates a revenue growth of more than double, reaching approximately $130.5 billion, compared to the previous year. Additionally, net earnings are projected to rise by 145%, amounting to nearly $72.9 billion compared to its fiscal year 2024.

Over the past year, Nvidia’s share price has climbed by over 30%. If we look back five years, the stock has multiplied more than 16 times.

In my perspective, it’s undeniable that AI is shaping the future, and many are eager to jump on board this transformative wave. I, for one, believe that Nvidia serves as an accessible gateway into this exciting realm. However, as we build the foundations of this new world, Nvidia has undoubtedly reigned supreme as the dominant player in this formative stage of infrastructure development. But remember, the landscape may shift over time, giving rise to new champions and formidable contenders.

As a passionate film enthusiast, I’ve observed that when it comes to the fast-paced world of AI innovation, giants like Apple and Intel have occasionally lagged behind, perhaps underestimating the exponential rate at which this technology would progress, according to industry analysts.

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In the initial three months of this year, venture capitalists and private equity groups collectively invested approximately $3.1 billion into 144 different deals within the Los Angeles region, marking a 15% increase compared to the same period last year.

Who is Jensen Huang?

Huang, who used to design microprocessors, recently shared Nvidia’s concept with business partners Chris Malachowsky and Curtis Priem over a meal at a Denny’s in San Jose. The name of their company is partially derived from the Latin term “invidia,” which signifies envy, as reported by the Wall Street Journal. This implies that the company’s moniker symbolizes aspiring to be so impressive that others might feel envious of its success.

Today, numerous businesses find themselves envious of Nvidia’s current success, yet it is important to remember that the company nearly faced closure in the 1990s when its initial chip, NV1, failed as reported by media outlets. In his public statements such as speeches during graduation ceremonies, Huang has emphasized that hardships can serve as catalysts for personal growth and leadership development.

Originally from Tainan, Taiwan, in 1963, this former Denny’s dishwasher has risen to become one of the most prominent figures in the industry, alongside tech giants like Tim Cook (CEO of Apple) and Mark Zuckerberg (Meta). During Nvidia’s developer conference, many people tune in to Huang’s keynote speech, as his ideas could serve as a guide for companies looking to increase their investments in AI. Some experts even call him the “godfather of AI.”

Hailing from Tainan, Taiwan, born in 1963, this ex-Denny’s dishwasher is now recognized alongside tech titans such as Tim Cook (Apple CEO) and Mark Zuckerberg (Meta). During Nvidia’s developer conference, numerous individuals listen to Huang’s keynote address, as his thoughts may pave the way for companies looking to boost their AI investments. Analysts often refer to him as the “godfather of AI.

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Researchers and entrepreneurs are hastening to create and implement drones, sensors, and systems for analyzing satellite images, which they think might have significantly lessened the destruction caused by the wildfires in Los Angeles.

What challenges lie ahead?

The biggest challenges facing Nvidia are trade wars and competition, analysts say.

High tariffs on the semiconductor market may potentially harm corporations such as Nvidia, given they produce and distribute a significant number of their chips overseas. In its annual report, Nvidia stated that approximately 53% of its projected revenue for the fiscal year 2025 originates from sources outside the United States.

The organization has warned that escalating geopolitical issues in regions such as China, Hong Kong, Israel, Korea, and Taiwan – key areas for their product component manufacturing and assembly – might lead to disruptions in their operations, market demand, and overall financial success.

Nvidia has worked with its production partners to increase U.S. manufacturing of its chips.

In the past, US trade restrictions on Nvidia’s chip sales to China were imposed due to worries that their AI technology might aid the Chinese military. Huang, however, felt that since such restrictions could be applied by the U.S. government, there was no need for policymakers to worry about it. Instead, he cautioned that if Nvidia were to lose market share in China, it would give a significant edge to Chinese tech giant Huawei, as reported by Bloomberg.

It’s true that numerous experts believe Nvidia currently holds an advantage over rival companies. However, there’s always the potential for competitors to narrow or even close this gap in time. Notably, OpenAI, a company that uses Nvidia products including those for ChatGPT, is reportedly working on creating their own custom chip designs, as per Reuters.

Additionally, there’s a concern about whether the current power grid can handle the increasing energy demands of rapidly advancing technology, as this might potentially hinder not only companies like Nvidia, but also the broader artificial intelligence community.

Hollywood Inc.

It’s anticipated that the vacancy rate in San Francisco will decrease towards the end of this year, as a result of tech companies like OpenAI and other AI startups expanding their offices within the city.

Regardless of the obstacles, Thomas Monteiro, a senior analyst with Investing.com, remains optimistic about Nvidia’s prospects. He suggests that there’s a chance the company might achieve a staggering market capitalization of $5 trillion within the next 18 months.

From a film enthusiast’s perspective, I can’t help but notice that the world is playing catch-up when it comes to AI. It’s going to take decades for them to truly match our current pace. Given that we view the AI revolution as a long-term transformation spanning multiple decades, it seems nearly impossible to displace Nvidia from its leading role in this field.

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2025-07-16 13:31

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