SANTA CLARA, CA – Nvidia’s shares surged to a record high on Wednesday, signaling a robust turnaround for the chipmaker after a challenging start to the year. The rise comes amid renewed optimism in artificial intelligence (AI) technologies, following tensions between the US and China over critical AI advancements.
Immediate Impact
The US-based chip designer saw its stock climb by 4.3%, positioning Nvidia ahead of Microsoft as the world’s most valuable company with a market capitalization of $3.77 trillion, surpassing Microsoft’s $3.66 trillion.
Key Details Emerge
The rally was fueled by Nvidia CEO Jensen Huang’s optimistic outlook during the company’s annual shareholder meeting. Huang emphasized the “multitrillion-dollar opportunity” presented by AI and robotics, forecasting significant growth over the next decade.
“We are at the beginning of a decade-long AI infrastructure build-out: demand for sovereign AI is growing around the world,” Huang told shareholders.
Industry Response
Concerns that tech giants like Microsoft and Amazon might reduce their investment in AI infrastructure have diminished. During the latest earnings season, these companies reiterated their commitment to AI-related expenditures.
Micron, a key memory supplier to Nvidia, reported record revenues of $9.3 billion, exceeding Wall Street’s expectations of $8.9 billion for the quarter ending in May. The company also projected robust growth in AI demand.
By the Numbers
- Nvidia’s market capitalization: $3.77 trillion
- Microsoft’s market capitalization: $3.66 trillion
- Micron’s quarterly revenue: $9.3 billion
- Projected AI market size: $400 billion in four years
Background Context
Nvidia’s stock faced challenges earlier this year after a breakthrough by China’s DeepSeek, raising concerns about Nvidia’s dominance in the global AI market. This event led to a significant loss in market value, nearly $600 billion.
Additionally, US-imposed restrictions on Nvidia’s China-specific H20 AI chips further impacted the company’s access to the Chinese market, projected to be worth $50 billion in the coming years. Nvidia is exploring redesign options for its Blackwell chips to comply with these export controls.
Expert Analysis
Daniel Newman, CEO of Futurum Group, remarked on Nvidia’s ability to maintain its rapid pace of innovation. “Even though cloud providers like Amazon and Microsoft want to build their own vertically integrated AI infrastructure, right now there’s no situation where the best technology stack isn’t Nvidia,” he said.
Competitors like AMD pose a threat in the advanced AI chip market, yet the anticipated market size of $400 billion over the next four years suggests ample opportunity for multiple players.
What Comes Next
Nvidia is committed to an annual release of AI chips and is preparing for the launch of Vera Rubin, following its successful Blackwell systems. The company has secured deals with sovereign entities, including Saudi Arabia and the UAE, highlighting the growing demand for advanced AI infrastructure.
Huang’s recent tours in the Gulf states and Europe underscore Nvidia’s strategic push into new markets, promoting a new era of “accelerated computing” and promising productivity enhancements across various industries.
G Dan Hutcheson, vice-president at TechInsights, noted, “Nvidia is riding a general chip wave,” as markets recover from the impact of previous tariffs and technological breakthroughs.
The story of Nvidia’s resurgence in the AI industry continues to unfold, with the company poised to capitalize on the expanding market and technological advancements.
