In a historic moment for global markets, NVIDIA has become the first publicly traded company to reach a staggering $4 trillion market capitalisation, underscoring its pivotal role in the artificial intelligence revolution.
The chipmaker’s shares climbed to an all-time high of $164 this week, fuelled by relentless investor enthusiasm for AI technologies.
Originally known for its graphics processing units (GPUs) tailored to gaming, NVIDIA has transformed into the backbone of the AI boom.
Its high-performance chips now power everything from large language models to autonomous systems, making it indispensable to tech giants like Microsoft, Meta, and Alphabet.
Since the debut of ChatGPT in late 2022, NVIDIA’s stock has surged nearly 900%, outpacing both the broader market and its semiconductor peers.
The company’s meteoric rise is backed by explosive financials. In the first quarter of 2025 alone, NVIDIA reported $44.1 billion in revenue, with its data centre division contributing over 88% of that figure.
Analysts attribute this growth to the insatiable demand for AI infrastructure, with firms investing tens of billions in data centres and cloud computing.
Despite geopolitical headwinds, including export restrictions to China and tariff uncertainties, NVIDIA has demonstrated remarkable resilience.
Its valuation now exceeds the combined worth of the Canadian and Mexican stock markets and is just shy of India’s GDP. It is also larger than the UK’s GDP. Is this valuation sustainable?
As AI continues to reshape industries, from healthcare to finance, NVIDIA stands at the forefront, not just as a chipmaker, but as a symbol of technological ascendancy. Whether this dominance is sustainable remains to be seen, but for now, Wall Street has crowned its new titan.
And with AI showing no signs of slowing, NVIDIA’s ascent may be just the beginning of a new era in market leadership.
But what really is NVIDIA’s true value – is it overpriced?
Many analysts argue that NVIDIA is currently overvalued, at least by traditional metrics. For example, AlphaSpread estimates its intrinsic value at around $112.25, while its market price hovers near $158, suggesting it’s overvalued by roughly 29%.
Nvidia one-year share price chart at new high as of 9th July 2025
Similarly, a discounted cash flow (DCF) analysis from TheStreet indicates the stock may be worth 8% less than its current price.
But here’s the twist: NVIDIA isn’t just any stock. It’s the dominant force in AI hardware, with over 80% market share in data centre accelerators.
That kind of monopoly in a rapidly expanding sector makes traditional valuation models look a bit… well, quaint.
Some investors argue that its growth trajectory and pricing power justify the premium, especially with AI demand scaling across industries.
Still, others caution that the hype may be outpacing fundamentals. To justify its current valuation, NVIDIA would need to generate over $1.2 trillion in cash flow over the next 20 years—an ambitious target even for a tech titan.
So is it overpriced?
If you’re a value investor, probably yes. If you’re betting on AI transforming the world and NVIDIA staying at the centre of it, maybe not.
When will the companies investing in AI see the returns on their investment?
And NVIDIA isn’t the only AI show in town.