Nvidia Corp.’s market capitalization passed $1 trillion today following a more than yearlong rally in its stock price.

The chipmaker officially reached the $1 trillion mark at the opening bell, when its shares started trading for $405.95 apiece. Nvidia’s stock briefly exceeded that price during trading before dipping lower. To keep its $1 billion valuation, the chipmaker must maintain a share price of $404.86 or higher.

Today’s milestone makes Nvidia one of only a handful of major tech firms to have achieved a $1 trillion market capitalization. The achievement is partly the result of the chipmaker’s strong quarterly earnings report last week, which helped increase its stock price by 26% on a single day.

Financial analysts had expected Nvidia to post fiscal first-quarter revenues of $6.52 billion last Wednesday. Instead, the company reported $7.19 billion in revenue and projected that its sales during the current quarter will exceed the consensus estimate by nearly $4 billion.

The chipmaker’s previous earnings report likewise topped expectations and boosted its stock price. Overall, Nvidia’s shares are reportedly up more than 166% over the past 12 months. 

The company’s current growth streak is driven almost entirely by its data center unit. The unit’s graphics processing units, which are optimized for machine learning, are in high demand amid the rapid industry adoption of artificial intelligence models.

At a financial analyst event two months before its latest earnings report, Nvidia detailed some of the contributors to its recent revenue growth. Executives pointed out that the company’s developer ecosystem more than doubled since 2020 to over four million engineers. During the same time frame, the number of AI startups active worldwide grew from 6,000 to 14,000.

Those startups are investing heavily in AI hardware such as GPUs to support their development efforts. According to recent reports, some of the most well-funded AI startups plan to spend more than $1 billion on infrastructure over the next few years. That trend is helping to field demand for Nvidia silicon.

The chipmaker’s plan to continue increasing its revenue and stock price doesn’t focus on GPUs alone. Earlier this week, Nvidia announced that it has started full production of the GH200 Superchip, which combines a GPU with a central processing unit in an integrated module. Nvidia also offers a range of DPU chips designed to make data centers more efficient.

In late February, Nvidia estimated that its chips and systems business has a $300 billion addressable market.

Nvidia is one of several major tech firms to have achieved a $1 trillion market capitalization in recent years. Apple Inc. became a $1 trillion company in August 2018, while Microsoft Corp. reached the same milestone a few months later. Amazon.com Inc. and Google LLC both followed suit in January 2020 about two weeks apart.

Photo: Nvidia