How AI-Chip Demand Boosted Nvidia’s Market Cap by $2 Trillion in 2024
Giant chip manufacturer Nvidia has taken the title of 2024 biggest market capitalization gainer in the world. According to Reuters, Nvidia’s market boost came from the surging interest in AI and the high demand for AI-powered chips across industries.
Significant Growth
At the beginning of 2024, Nvidia’s market capitalization stood at $1.2 trillion. The company added $2 trillion to its market valuation to close the year at $3.28 trillion. This growth made the company the second most valuable listed company after Apple.
The tech giant’s stocks closed 2024 with a 170% gain. This growth was driven by the rising demand for Nvidia’s AI-centric chips as big techs like Microsoft, Google, and Meta rushed to beef up their cloud computing and AI data center infrastructure. In 2023, Nvidia stock prices rose by 240%.
Nvidia stocks are expected to continue leading the markets in 2025. Analysts at Goldman Sach forecast that Nvidia, Apple, Amazon, Meta, Microsoft, Tesla, and Google will outdo all the other stocks in the S&P 500 by about 7% in 2025. If this forecast comes true, this will be the lowest margin in about 7 years.
Big Tech Performance
As Nvidia’s market capitalization rose in 2024, Apple maintained a strong lead in market value. The iPhone maker almost made history by hitting a $4 trillion market valuation. This growth was driven by investor confidence in the company’s AI enhancements that were focused on reinvigorating iPhone sales.
However, Nvidia notched Apple’s market capitalization after its stocks closed at a record $138.07 on October 14, 2024. The 2.4% share surge pushed the AI-chip maker closer to becoming the most valuable company in the world.
By the end of 2024, Apple maintains its most profitable listed company in the world with a $3.78 trillion market valuation, followed closely by Nvidia with a $3.28 trillion valuation. Microsoft ranks third with a $3.1 trillion market valuation while Alphabet and Amazon come fourth and fifth with $2.3 trillion valuations.
The five big techs were the biggest electronic market-makers. They boosted global indexes significantly throughout 2024. The Nasdaq surged by 28.6% while the S&P 500 gained 23.3%.
2025 Forecast
Analysts forecast that the big techs performance will continue in an upward trajectory in 2025 despite the US-China tariffs wars and the potential interest rate cuts. Wedbush analyst, Daniel Ives forecasts a 25% rise in big tech stocks in 2025.
“We believe tech stocks will be robust in 2025 on the shoulders of the AI Revolution and $2 trillion+ of incremental AI cap-ex over the next 3 years,” he said.
Ives attributes this growth to the less stringent regulatory environment under the incoming President, Donald Trump, a stable foundation for the big techs, and upcoming AI initiatives. But this is not certain because it’s still unclear whether Trump will continue pursuing big techs during his second term.
Last week, Law Professor at University of Tennessee Maurice Stucke said there are indications that things could get tougher for big techs under the Trump administration. Previously, the President-elect has said he has no intentions of easing up on big techs.
