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On June 27, 2025, shares of Nvidia surged by 1.72% to touch its closing all-time high of $157.75, taking the tech giant’s mcap to $3.85 trillion.
Nvidia’s rapid ascent has been powered by relentless demand for its AI chips, which are widely used by tech giants including OpenAI.
Once known mainly for powering high-end video games, Nvidia has seen massive growth in the past 3-4 years on the back of AI (artificial intelligence) adoption surge. The chipmaker, which hit a market capitalisation of $1 trillion two years ago, is now on the path of touching the massive $4-trillion mcap mark soon.
On June 27, 2025, shares of Nvidia surged by 1.72% to touch its closing all-time high of $157.75, taking the tech giant’s mcap to $3.85 trillion. The company is now bigger than the giants like Microsoft and Apple. Just a few years ago, this seemed unimaginable.
After Nvidia, Microsoft has the second-highest mcap at $3.68 trillion, followed by Apple ($3 trillion), Amazon ($2.37 trillion), and Google ($2.15 trillion).
How Has Nvidia Grown Exponentially In Short Period?
Nvidia’s ascent is built on its dominance in a very specific kind of chip — the GPU (graphics processing unit). While GPUs were originally used for rendering complex visuals in games, researchers and developers discovered that the same chips were perfect for training large AI models. This realisation sparked a surge in demand that Nvidia has been uniquely positioned to meet.
The company’s rapid ascent has been powered by relentless demand for its AI chips, which are widely used by tech giants including OpenAI.
The company’s most advanced chips, like the H100 and its successors, are now powering everything from AI chatbots and virtual assistants to data centers and supercomputers.
Tech giants such as Google, Amazon, Microsoft, Meta, and even governments are all customers of Nvidia’s AI chips.
A key thing that has boosted investor excitement is Nvidia’s record-breaking profits quarter after quarter. Its data centre business, which includes sales of AI chips, is booming. And, as companies continue to invest billions into AI, demand for Nvidia’s hardware shows no signs of slowing.
Nvidia’s valuation boom has also been helped by strong market sentiment and optimism around AI’s future. According to analysts, the company might soon cross the $4 trillion mark and even touch $5 trillion in the next year or two, considering its growth pace.
Nvidia’s PE Multiple, Other Concerns
Though the company’s valuation has boomed significantly, it has also inflated its PE multiple, a key metric for investors to determine how costly is the company.
Currently, Nvidia’s valuation is high — 50.7 times its earnings — which means any slowdown could make investors nervous.
The company also depends heavily on Taiwan’s TSMC for chip manufacturing, exposing it to geopolitical risks. And, while Nvidia is currently unmatched in AI hardware, competitors are working hard to catch up.
However, for now, Nvidia remains far ahead of the curve.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to markets, economy and companies. Having a decade of experience in financial journalism, Haris has been previously asso…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to markets, economy and companies. Having a decade of experience in financial journalism, Haris has been previously asso… Read More
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