SANTA CLARA, California: Nvidia came within a whisker of making financial history on July 3, briefly surpassing Apple's all-time market value record and edging toward becoming the most valuable company ever.

The AI chipmaker's market capitalization hit US$3.92 trillion in early trading, fuelled by soaring investor confidence in artificial intelligence. Its share price rose as much as 2.4 percent to $160.98, nudging past Apple's record close of $3.915 trillion set on December 26, 2024.

Shares later settled at $159.60, leaving Nvidia's market value just shy of the all-time high at $3.89 trillion.

Nvidia's cutting-edge chips have become essential to training large AI models, making its products highly sought after amid an AI arms race among tech giants.

Microsoft followed closely behind with a valuation of $3.7 trillion, while Apple trailed in third at $3.19 trillion, despite its own gains on the day.

The high-stakes race to build AI data centres has driven up demand for Nvidia's processors, with companies like Microsoft, Amazon, Meta, Alphabet, and Tesla fuelling its rise.

"When the first company crossed a trillion dollars, it was amazing. And now you're talking four trillion, which is just incredible," said Joe Saluzzi, co-manager of trading at Themis Trading. "It tells you that there's this huge rush with AI spending and everybody's chasing it right now."

According to LSEG, Nvidia's valuation has exploded nearly eightfold in four years, from $500 billion in 2021, surpassing the combined value of the Canadian and Mexican stock markets and even exceeding all UK-listed companies.

Despite the surge, Nvidia's stock trades at about 32 times expected earnings—lower than its five-year average of 41—as earnings forecasts continue to climb faster than share prices.

The rebound in Nvidia stock—up 68 percent since its April 4 low—coincides with recovering U.S. markets after global jitters tied to President Donald Trump's tariff announcements. Optimism around potential trade agreements has helped soothe investor nerves.

The company now makes up 7 percent of the S&P 500, with Nvidia, Microsoft, Apple, Amazon, and Alphabet collectively accounting for 28 percent of the index. That means everyday savers in S&P 500 index funds are increasingly tied to AI's fate.

"I strongly believe that AI is a greatly productive tool, but I am fairly sure that the current delivery of AI via large language models and large reasoning models is unlikely to live up to the hype," warned Kim Forrest, chief investment officer at Bokeh Capital Partners.

Founded in 1993 by Jensen Huang, Nvidia has transformed from a gaming-focused chipmaker into the bellwether of the AI revolution. Its rise has reshaped the semiconductor landscape, especially after replacing Intel on the Dow Jones Industrial Average last November.

Nvidia's stock has rallied after a slow start to the year. Investor excitement over AI was briefly overshadowed by trade tensions and a cut-price AI model from China's DeepSeek, which prompted fears of reduced spending on high-end processors.

But if the numbers are any indication, Wall Street's AI enthusiasm is far from cooling.