Nvidia added $2 trillion to its market cap in 2024 because of the AI boom

Nvidia emerged as 2024’s biggest market value gainer globally, adding $2 trillion to reach a $3.28 trillion valuation, driven by widespread adoption of its AI chips.

Market performance highlights: The chipmaker’s remarkable growth positioned it as the world’s second-most valuable listed company by the end of 2024, up from a $1.2 trillion valuation in 2023.

• Apple maintained its position as the most valuable company globally, approaching $4 trillion in market value
• Microsoft secured the third position with a $3.1 trillion valuation
• Alphabet Inc and Amazon followed, each reaching approximately $2.3 trillion in market value

Tech sector impact: Major technology companies drove significant gains in key market indexes throughout 2024.

• The S&P 500 index recorded a 23.3% increase
• The Nasdaq composite showed even stronger performance with a 28.6% gain
• These gains occurred despite higher valuations and ongoing U.S.-China trade tensions

Expert outlook: Market analysts maintain a positive perspective on tech sector performance for 2025, despite potential challenges.

• Wedbush analyst Daniel Ives forecasts a 25% increase in tech stocks for 2025
• The prediction accounts for an anticipated less restrictive regulatory environment under Donald Trump
• Analysts expect strong AI initiatives to continue driving growth
• Market watchers project a stable foundation for Big Tech companies and Tesla

AI investment trajectory: The technology sector’s growth trajectory appears poised to continue, supported by substantial capital expenditure.

• Industry experts anticipate over $2 trillion in AI-related capital expenditure over the next three years
• Apple’s strategy includes AI enhancements aimed at boosting iPhone sales
• The broader tech sector continues to invest heavily in AI capabilities and infrastructure

Future considerations: While the tech sector’s momentum remains strong, several factors could influence market performance in 2025, including the pace of U.S. interest rate adjustments and ongoing international trade dynamics, suggesting careful monitoring of these variables will be crucial for investors.