Nvidia Market Cap Surpasses $4.5 Trillion on AI Boom

Nvidia (NVDA) shares surged to a new record high on Tuesday, climbing nearly 3% and propelling the chipmaker’s market capitalization past the $4.5 trillion mark. This latest rally underscores investor confidence in Nvidia’s dominant position within the rapidly expanding artificial intelligence landscape.

The stock is currently up approximately 39% year-to-date, fueled by Nvidia’s strategic deal-making and its central role in powering the AI revolution. The company’s silicon is increasingly viewed as essential infrastructure for AI development and deployment.

Recent reports suggest a potential deepening of ties between Nvidia and OpenAI. Rumors indicate a possible equity stake acquisition by Nvidia in the AI startup, potentially reaching up to $100 billion. Furthermore, plans for massive, Nvidia-powered data centers, totaling hundreds of billions of dollars in investment, are reportedly in the works to support OpenAI’s growing computational demands. The ambition behind this project is substantial, highlighting the scale of resources required to advance leading-edge AI models.

The collaborative effort, known as “Stargate,” is estimated to require a substantial $500 billion investment, according to sources familiar with the project. Nvidia CEO Jensen Huang has stated that Nvidia’s technology will account for roughly 70% of the cost of a modern AI data center. This represents not just raw processing power but also sophisticated networking and software optimization crucial for efficient AI model training and serving.

Citi analysts have responded to these developments by raising their price target for Nvidia from $200 to $210, citing an increased forecast for AI infrastructure spending. The investment bank’s analysis points to the growing demand for GPUs, particularly in large scale AI deployments like OpenAI’s. Analyst Atif Malik noted in a research note, “We believe OpenAI came to Nvidia asking for help as Nvidia has a very compelling product, and as the number of users and compute being consumed per user basis is growing.”

The demand for AI infrastructure extends beyond OpenAI. Tech giants like Meta (META) and Google (GOOGL) are also significantly increasing their investments in this area. Each company has unique approaches to AI, generating a healthy competitive environment that stimulates innovation across hardware and software.

CoreWeave (CRWV), a cloud provider in which Nvidia holds a significant stake, announced a deal to provide Meta with $14.2 billion in AI infrastructure services. This strategic partnership showcases the growing importance of specialized cloud providers that can meet the specific demands of AI workloads, further solidifying Nvidia’s ecosystem of supporting technologies.

Nvidia’s stock performance this year is only bested by Broadcom (AVGO) within the mega-cap tech sphere. The semiconductor company demonstrates their strong capabilities, which also benefits from the ripple effect of the AI surge, as both have enjoyed substantial gains related to their involvement with AI development. This emphasizes the degree to which technological advancements are currently driving financial success within the sector.