On Wednesday, Nvidia shares rose more than 4% to a record $154.10, lifting the chipmaker’s market capitalization to $3.76 trillion. That jump briefly put it ahead of Microsoft, whose valuation was $3.65 trillion.
The surge traced to a bullish forecast from Loop Capital. Analysts raised their price target on Nvidia to $250 from $175 and maintained a buy recommendation. They pointed to accelerating demand for generative AI workloads that could outpace earlier projections.
"We are entering the next ‘Golden Wave’ of Gen AI adoption and Nvidia is at the front-end of another material leg of stronger than anticipated demand," said Ananda Baruah, a Loop Capital analyst.
Rising excitement around AI has drawn investors back into technology names, with chipmakers and data-center operators leading the charge. Nvidia, whose high-performance GPUs power major AI training and inference platforms, has become a central figure in the resurgence. These graphics processors underlie many deep-learning models, from natural language processors to image-generation tools.
Nvidia’s rally has not pushed its valuation into stretched territory. Shares trade at about 30 times projected earnings over the next 12 months, compared with a five-year average closer to 40. The discount largely reflects analysts boosting forecasts as Nvidia continues to post expanding margins and revenue growth. Revenue for its data-center segment has surged quarter after quarter, underscoring its leadership in GPU design.
Over the past year, Nvidia, Microsoft and Apple have traded places as the market’s top-value stocks. Microsoft had held the lead until this week, when Nvidia reclaimed the crown. Apple shares ticked up 0.4% on Wednesday, valuing the tech giant at roughly $3 trillion. Each of these companies has seen its share price react to shifts in cloud computing, software demand and consumer electronics cycles.
Nvidia shares have jumped over 60% from an early-April trough triggered by tariff announcements that rattled the chip sector. In early April, policymakers unveiled new levies on semiconductor components, spurring concerns about supply-chain bottlenecks and profit margins. Since that sell-off, sentiment has steadied on hopes of near-term trade agreements to ease cross-border tensions. Broader equity markets have also recovered from those spring declines, lifting cyclical and growth names alike.
Tech stocks at large have enjoyed a lift this year. The S&P 500 technology index gained 0.9% on Wednesday to set another high, pushing its 2025 advance close to 6%. Other technology benchmarks, including the Nasdaq Composite, have registered similar gains as investors chase growth opportunities.
Tesla is known for its electric vehicles but is expanding its AI ambitions to power a forthcoming robotaxi network and other robotic initiatives. The company is building out on-board compute systems alongside next-generation neural network chips designed in-house. CEO Elon Musk has underscored the strategic importance of AI to Tesla’s future growth trajectory.
Much of the spotlight has fallen on Tesla’s push to launch a self-driving ride-hailing service, yet Musk has sketched a wider AI play. One example is Optimus, a humanoid robot under development to assist with factory assembly and, eventually, in homes. During recent presentations, Musk suggested that Optimus could handle various manual labor tasks that remain costly or difficult for human workers.
Jensen Huang, Nvidia’s co-founder and chief executive, recently described humanoid robotics as “multitrillion-dollar industry.” He highlighted Tesla’s Optimus project among several initiatives that have drawn his interest, noting the rapid pace of innovation in the field.
Tesla sees two initial uses for Optimus. First, the robot would train via machine learning to assist on the company’s own production lines, gradually taking on more duties without breaks to drive further increases in output. This could help Tesla address labor shortages and enhance factory efficiency during model ramp-ups.
Second, Tesla plans to market Optimus to industries with physically demanding workloads, adapting the platform for repetitive tasks beyond automotive assembly. Musk has said that Optimus could eventually become more valuable than Tesla’s core auto division. The company has hinted at potential collaborations in warehousing, logistics and other heavy-labor settings.
Other firms are pursuing similar goals, too. Nvidia-backed startup Figure AI is creating humanoid machines aimed at collaborating with workers on manufacturing floors. A recent demonstration video showcased how these robots could handle routine tasks and work alongside people to boost productivity. These projects highlight a growing intersection between GPU-driven AI research and physical robotics development.
Tesla’s share price has climbed nearly 30% so far this year, fueled in part by its initial robotaxi trials in Texas, which began this week. Early customer feedback and on-the-ground data collection have helped underpin investor enthusiasm. The trials use modified Model 3 vehicles outfitted with additional sensors and onboard GPUs. The trial marks a key step in Tesla’s roadmap toward fully autonomous ride-hailing operations.
But some analysts caution that the stock may already reflect peak expectations around Optimus. Tesla’s shares often oscillate around high-profile announcements, a pattern that may repeat with its robotics and ride-hailing milestones. Investors have seen similar swings tied to Autopilot software updates and vehicle delivery targets.
Though Optimus holds long-term promise, it remains in early stages of development. Crucial questions persist about scaling production, meeting performance benchmarks and turning the project into a profitable business model. Time will tell whether the company can translate proof-of-concept demos into large-scale commercial deployments.
Investors focused on Tesla’s AI strategy may wait for clearer progress before committing fresh capital.