Nvidia's AI-Driven Rise to a $2 Trillion Market Valuation in 2024

The demand for artificial intelligence (AI) technology and the corresponding surge in the need for AI-centric chips have propelled Nvidia Corp (NVDA) into the prestigious trillion-dollar market capitalization club for 2024. While Nvidia has reached this milestone, it still trails behind Apple Inc (AAPL), which benefitted from investor interest regarding its potential AI advancements, greatly boosting its iPhone sales.

According to reports, Nvidia's valuation saw an astonishing increase, surpassing $2 trillion to reach over $3 trillion in 2024, positioning it as the second-most valuable publicly traded company in the world. This remarkable achievement is largely credited to Nvidia's graphics processing units (GPUs), which were originally designed for gaming but have become essential for developing AI models.

Nvidia has also significantly increased its investments in startups, pouring $1 billion into more than 50 funding rounds in 2024, which marks an increase from $872 million in 2023. Notably, Nvidia invested in Elon Musk's company xAI, while also acquiring several AI-related firms, including Run:ai, Nebulon, and OctoAI.

Looking ahead, Nvidia perceives robotics as a critical area for growth amidst intensifying AI competition. The company has plans to launch Jetson Thor computers, specifically designed for humanoid robots, set for release in 2025, aligning with Tesla Inc's (TSLA) objective to introduce its humanoid robot, Optimus, by 2026.

In addition to Nvidia, other notable trillion-dollar technology companies include Microsoft Corp (MSFT), Alphabet Inc (GOOGL), and Amazon.com Inc (AMZN). In 2024, Broadcom Inc (AVGO) also entered the trillion-dollar valuation club, largely fueled by the demand for its custom chips from major U.S. technology firms. Remarkably, by 2024, one-third of the top ten global companies valued over $1 trillion were from the semiconductor industry.

These firms, including Nvidia, have played a key role in driving the S&P 500 and Nasdaq indices to impressive gains of 23% to 29% in 2024, despite external challenges such as potential tariffs from former President Donald Trump and concerns regarding U.S. interest rates. Daniel Ives from Wedbush anticipates that technology stocks will continue to rise, predicting a 25% gain in 2025 due to favorable regulatory policies under Trump and increasing investments in AI technologies.

Over the past year, Nvidia's stock price has soared by an impressive 203%. For investors looking to gain exposure to Nvidia, options include the VanEck Semiconductor ETF (SMH) and the Fidelity MSCI Information Technology Index ETF (FTEC).

Price Action: As of the latest trading updates, NVDA shares are up by 4.28%, trading at $144.23.

Nvidia, AI, Investments