Microsoft's market value soars beyond $4 trillion, propelled by artificial intelligence-driven stock growth
In a remarkable turn of events, two tech giants, Nvidia and Microsoft, have made headlines by reaching or surpassing $4 trillion in market capitalization. This milestone comes as a testament to the growing demand for artificial intelligence (AI) and the substantial economic impact it is having in 2025.
As markets opened, both the S&P 500 and Nasdaq were above their all-time closing highs. The Nasdaq Composite Index was at 21,396.04 about 25 minutes into trading, and it continued to climb, up 1.3 percent during the day's trading. The S&P 500 also saw a gain of 0.8 percent, reaching 6,413.89, while the Dow Jones Industrial Average advanced 0.3 percent to 44,584.16.
The markets greeted the South Korea announcement as another resolution of terms with a key U.S. economic partner following a period of uncertainty. This positive news, combined with the strong performances of Nvidia and Microsoft, contributed to a bullish sentiment among investors.
Nvidia, known for its dominant 75% to 80% market share in AI accelerators, is projected to hit $5 trillion in market value before the end of 2025. This growth is driven by substantial orders from major AI investors like Microsoft and Meta, as well as the easing of U.S. export restrictions on Nvidia’s H20 AI chips to China, which is expected to unlock an additional $15 billion in sales for the company in the latter half of 2025.
Nvidia’s fiscal 2026 first-quarter revenue soared 69% year-over-year to $44 billion, with the data center segment (including AI chips) accounting for $39 billion or 89% of total revenue. This impressive growth has led to a surge in Nvidia’s revenue from $27 billion in 2022 to $130 billion recently, with net income rising from $9.8 billion to $73 billion. This reflects a staggering 1080% increase in its stock price over this period.
Microsoft, on the other hand, crossed the $4 trillion market cap milestone in early August 2025. This was propelled by an 18% year-over-year revenue rise to $76.4 billion in its fiscal 2025 fourth quarter and net income growth exceeding 23% to $34.3 billion. The cloud computing segment Azure grew 34% to over $75 billion in revenue, largely driven by AI demand. Microsoft’s massive AI infrastructure investment, combined with that of Meta, fuels ongoing spending on Nvidia's AI chips, perpetuating Nvidia’s growth cycle.
In conclusion, the exceptional market performances of Nvidia and Microsoft, two companies heavily investing in AI, underscore the AI sector's substantial economic impact in 2025. As these companies continue to innovate and invest in AI, it will be interesting to see how the sector evolves and what new milestones will be reached in the future.
[1] CNET
[2] Business Insider
[3] TechCrunch
[4] Microsoft Investor Relations
- The surge in Nvidia's stock price, fueled by substantial orders from AI investors like Microsoft, has led to a projection that Nvidia will reach $5 trillion in market value before the end of 2025.
- As both Nvidia and Microsoft continue to invest heavily in artificial intelligence (AI), their market performances serve as a testament to the growing demand for and the substantial economic impact of AI in 2025.
- The ongoing spending on Nvidia's AI chips, driven by Microsoft's massive AI infrastructure investment, perpetuates Nvidia’s growth cycle, demonstrating the interconnectedness of business, technology, and finance, particularly in the AI sector.
