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

The artificial intelligence frenzy and demand for its AI-centric chips catapulted Nvidia Corp NVDA into the trillion-dollar market cap club for 2024. It lags behind Apple Inc 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 TSLA targeting the availability of its humanoid robot, Optimus, by 2026.

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

Broadcom Inc 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 SMH and Fidelity MSCI Information Technology Index ETF FTEC.

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

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Photo courtesy of Nvidia