Nvidia, the leading chipmaker, made history on Wednesday by becoming the first publicly traded company to achieve a market valuation of $40 billion, as its stock price continues its remarkable ascent.

The shares of this top chip designer surged approximately 2.4% to reach $164, fueled by an increasing demand for artificial intelligence technology. Nvidia’s chips and related software are recognized globally as the benchmark for developing AI products.

Nvidia initially reached a market value of $10 billion in June 2023, and since then, its market valuation has more than tripled in under a year, outpacing giants like Apple and Microsoft, and ranking alongside US companies with market valuations over $30 billion. Apple was the first to hit a $3 trillion valuation in 2022.

Microsoft stands as the second-largest US company with a market value estimated around $3.75 trillion. Nvidia’s valuation represents about 7.3% of the S&P 500, a widely regarded index on Wall Street. Meanwhile, Apple and Microsoft contribute roughly 7% and 6% respectively.

Nvidia has rebounded nearly 74% from its low in April, a period when the global markets faced turbulence caused by tariffs imposed by Donald Trump. The company has also retaliated against US export controls by restricting the sale of its most advanced chips to China.

However, positive outlooks regarding trade agreements have propelled the S&P 500 to unprecedented heights recently.

Daniel Ives, a tech analyst at Wedbush, forecasts that other major tech players will join Nvidia in surpassing the $4 trillion market cap. “The leading figures in the AI Revolution are Nvidia and Microsoft, as both embody the most significant tech trends we’ve witnessed in 25 years,” he stated.

Microsoft also reached a market value of $40 trillion this summer and aims to reach $5 trillion within the next 18 months.

Report contributed by Reuters