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Nvidia shares hit a record high on Wednesday, marking a turnaround for the chip company following a rocky start to the year marked by US-China tensions over critical artificial intelligence technology.
The US chip designer’s shares rose 4.3 per cent, putting Nvidia decisively ahead of Microsoft as the world’s most valuable company, with a $3.77tn market capitalisation compared with Microsoft’s $3.66tn.
The rally came as Nvidia chief executive Jensen Huang gave a bullish outlook at the company’s annual shareholder meeting on Wednesday about its ability to continue its explosive growth over the next decade. He cited the “multitrillion-dollar opportunity” of AI and robotics.
“We are at the beginning of a decade-long AI infrastructure build-out: demand for sovereign AI is growing around the world,” Huang told shareholders.
Concerns that tech giants such as Microsoft and Amazon might pull back on their massive spending on the infrastructure behind AI have abated. During the most recent earnings season, tech companies reiterated their commitment to these investments.
Nvidia followed this with a solid earnings report at the end of May in which it beat Wall Street expectations.
Nvidia’s stock was dented earlier this year when a breakthrough by China’s DeepSeek led to concerns about the durability of Nvidia’s dominant position in the global AI infrastructure market. That event wiped nearly $600bn from the company’s market value.
Its stock was also knocked after US President Donald Trump introduced new restrictions on Nvidia’s China-specific H20 AI chips in his trade conflict with China.
The move has closed off Nvidia’s access to the Chinese market, which it says could reach $50bn in the coming years. Nvidia is considering a redesign to its Blackwell chips to continue to serve the China market while complying with the export controls.
Daniel Newman, chief executive of research company Futurum Group, said the rally was “about the ability of Nvidia to move as fast as it’s moving”.
“Even though cloud providers like Amazon and Microsoft want to build their own vertically integrated AI infrastructure, right now there’s no situation where the best technology stack isn’t Nvidia,” he said.
Threats from competitors such as AMD to take market share for advanced AI chips did not matter “if it’s a $400bn market in the next four years”.
Microsoft alone processed more than five times more requests to AI models such as ChatGPT last quarter compared with the year before, Huang told shareholders on Wednesday.
Other markets for Nvidia chips are also growing, including so-called neocloud AI companies, which offer access to leading AI chips. Nvidia-backed CoreWeave’s shares are up more than 300 per cent since its listing on Nasdaq in March, reflecting the return to investor optimism around the long-term growth prospects for AI.
Nvidia has committed to an annual release of AI chips and is positioning itself for the launch of Vera Rubin, which will follow its latest Blackwell systems that have seen massive demand, including from sovereign infrastructure deals with Saudi Arabia and the UAE.
Huang recently toured the Gulf states and Europe, announcing large deals as he touts a new era of “accelerated computing” and promises advances in productivity across all global industries.
“Nvidia is riding a general chip wave,” said G Dan Hutcheson, vice-president at TechInsights, with markets recovering from the impact of Trump’s “liberation day” tariffs and the DeepSeek breakthrough. “Nvidia was oversold because of both.”
