Nvidia stock continues to soar as analysts raise targets to $250 on AI chip demand. Can the rally hold, or is NVDA getting ahead of itself?

The stock is worth $4 trillion for a good reason. Nvidia's dominance in AI chips allows it to earn very high margins. Nvidia made $77 billion in net income on $148 billion of revenue over the last year, and its net income has increased 892% over the last three years.

Nvidia (NASDAQ:NVDA) stock was the first-ever company to hit a $4 trillion market cap. As the GPU colossus looks to $5 trillion and beyond, the big question in tech is which company will be second, and in what timeframe will number two be stepping up to the plate?

Nvidia stock hits record highs as U.S. export licenses unlock access to China’s $50B AI market. Click here to read an analysis of NVDA stock now.

The jump on Wednesday marks a milestone for the stocks, which embarked on a stunning rally in the years since ChatPGT debuted in 2022.

Nvidia became the world’s first company with a market capitalization of $4 trillion, as the Jensen Huang-led enterprise rides the artificial intelligence wave to beat titans of the tech industry, like Apple and Microsoft.

Currently, Nvidia accounts for nearly 8 percent of the S&P 500. That’s the highest weighting for a single stock in 45 years, according to Todd Sohn, senior ETF strategist at Strategas Securities. For context, industrials account for 8.7 percent of the index, while healthcare stands at 9.1 percent.

Nvidia topped a $4 trillion market cap for the first time as investors scooped stock in the tech giant building the hardware for the generative AI boom.

Nvidia made history Wednesday, reaching a milestone market capitalization. These three charts show its path to $4 trillion since the debut of ChatGPT.

Shares of Nvidia ended up 0.75 percent at $164.10, giving it a market value of $4.004 trillion as it benefits from an ongoing surge in demand for artificial-intelligence technologies. Nvidia’s stock market value briefly peaked above $4 trillion on Wednesday before closing at about $3.97 trillion.

Nvidia Corporation's $4T valuation is driven by AI growth, global partnerships, and quantum computing. Click to explore why it's not too late to invest in NVDA.