Nvidia's $2 Trillion AI Rally In 2024 Fueled by Chips, Startups, and Robotics

Anusuya Lahiri

January 3, 2025

Benzinga

The artificial intelligence frenzy and demand for its AI-centric chips catapulted Nvidia Corp (NASDAQ:NVDA) into the trillion-dollar market cap club for 2024. It lags behind Apple Inc (NASDAQ:AAPL), which was backed by investor curiosity over its potential AI offerings, turbocharging its iPhone sales.

Reuters reports that Nvidia’s valuation surged by over $2 trillion in 2024, reaching over $3 trillion, making it the second-most valuable public company. It owes its success to its GPUs, which were previously targeted at video games but ultimately transformed into critical hardware for developing AI models.

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According to the report, Nvidia invested $1 billion across 50 startup funding rounds in 2024 (versus $872 million in 2023), including Elon Musk’s xAI. It also acquired multiple AI players, including Run:ai, Nebulon, and OctoAI.

Nvidia eyes robotics as a growth catalyst amid rising AI competition. The chip designer plans to introduce Jetson Thor computers for humanoid robots in 2025, coinciding with Tesla Inc (NASDAQ:TSLA) targeting the availability of its humanoid robot, Optimus, by 2026.

Other trillion-dollar tech companies included Microsoft Corp (NASDAQ:MSFT), Google parent Alphabet Inc (NASDAQ:GOOGL) (NASDAQ:GOOGL), and Amazon.Com Inc (NASDAQ:AMZN).

Broadcom Inc (NASDAQ:AVGO) entered the trillion-dollar club in 2024, backed by demand for its custom chips from the U.S. Big Tech giants. In 2024, a third of the ten global companies worth over $1 trillion came from the chip industry.

These companies were instrumental in the S&P 500 and Nasdaq index’s surge of 23%—29% in 2024, backed by investor and analyst enthusiasm despite Donald Trump’s tariff threat and U.S. interest rate concerns.

Daniel Ives of Wedbush told Reuters he expects tech stocks to post a 25% gain in 2025, citing favorable regulatory policies under Donald Trump, AI capital expenditures, and more.

Nvidia stock surged 203% in the last 12 months. Investors can gain exposure to the stock through VanEck Semiconductor ETF (NASDAQ:SMH) and Fidelity MSCI Information Technology Index ETF (NYSE:FTEC).

Price Action: NVDA stock is up 4.28% at $144.23 at the last check Friday.

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