NEW YORK: The stunning rise of Nvidia to become the first publicly traded company valued at US$4 trillion underscores the massive importance to the stock market of the AI chipmaker and the technology sector.
Reaching the lofty milestone caps a massive run for Nvidia’s stock price, which has soared some 1,350 per cent since October 2022. This year, the chipmaker’s shares are up about 22 per cent against a 6 per cent rise for the S&P 500.
The company’s market value hit US$4 trillion in morning trading on Wednesday (Jul 9), about 13 months after it had first reached the US$3 trillion milestone.
Nvidia’s stock surge has given it significant weight in key equity indexes and ETFs that are more heavily influenced by companies with the biggest market values.
At around 7.5 per cent, Nvidia has the biggest weight in the S&P 500, which is widely viewed by investors as the benchmark for the US stock market. The stock has an even greater presence in more tech-heavy measures, such as the popular Invesco QQQ Trust ETF and the Philadelphia SE Semiconductor Index.
Its influence is less significant in the Dow Jones Industrial Average, which is weighted by stock prices as opposed to market values.
Nvidia may soon have company in the exclusive US$4 trillion club. Microsoft’s market value was hovering around US$3.7 trillion on Wednesday. Apple ranks third at about US$3.1 trillion.
Their massive market values also illustrate the hefty influence of tech and tech-related companies. The top seven S&P 500 weights, which also include Amazon.com, Alphabet, Meta Platforms and Broadcom, comprise about one-third of the index.
Nvidia’s gains also point to the increasing presence of the overall technology sector, which is by far the largest sector in the S&P 500.
The tech sector’s market value has grown to one-third of S&P 500 market value, nearly reaching the proportion that the sector hit during the height of the dot-com bubble in 2000.
Other tech stocks that have performed well in 2025 include Microsoft, up about 19 per cent this year, Oracle, up 40 per cent, and Palantir, up 88 per cent.
