Nvidia last night became the world’s first $4 trillion company as the chip designer’s remarkable rebound continued, writes Patrick Tooher.

Shares in the Silicon Valley tech giant rose almost two per cent in early trading to notch yet another milestone and beat the $3.9 trillion record set by iPhone maker Apple at its peak last December.

It means Nvidia is now worth more than the entire annual economic output of the UK and follows a faltering start to the year when the launch of China’s DeepSeek threatened to dent demand for its microchips, which are driving the artificial intelligence (AI) revolution.

Shares are up by more than two-thirds since May as fears over US trade tariffs receded. The latest rally stems from a commitment to AI spending from Nvidia’s biggest customers, including Microsoft, Meta, Amazon and Alphabet, who account for 40 per cent of sales.

They are projected to spend more than £250bn on AI, up from £230bn this year, according to analysts’ estimates compiled by Bloomberg.

"There’s obviously tremendous demand," said Brian Mulberry at Zacks Investment Management, who said Nvidia chips were needed for AI to move to the next level. Founded three decades ago, Nvidia first became the world’s biggest company last year and has vied with Apple and Microsoft for the top spot since.

Founder and chief executive Jensen Huang has developed something of a cult following among Nvidia’s army of devotees. Its shares are the best-performing of leading US companies over the past decade and account for 7.5 per cent of the benchmark index.

Huang is the biggest single shareholder, with a 3.8 per cent stake worth more than £110bn, as Nvidia has become the biggest beneficiary of a tech boom that has exceeded the headiest days of the turn-of-the-century dotcom era. It dominates the market for super-fast chips that fuel AI services such as ChatGPT, the OpenAI chatbot.

Huang has been bullish about the potential of AI and robotics to drive trillions of dollars in sales in coming years, as upgrades to processors and data centre infrastructure extend its lead over rivals.

Nearly 90 per cent of Wall Street analysts have a ‘Buy’ rating on Nvidia, meaning they think the shares will go even higher. Nvidia reports its latest earnings next month.

"What we’re going to see is if the company’s going to beat and raise guidance, like they tend to do," said Ken Mahoney, president of Mahoney Asset Management. Nvidia’s valuation is below its ten-year average, so shares could go higher, he added.

(Pic: Cheng Xin/Getty Images)