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'A dream scenario': Nvidia is the No. 1 chipmaker, again

Published: 04 Jun. 2025, 16:25

Nvidia logo [REUTERS/YONHAP]

Nvidia, which leads the artificial intelligence (AI) semiconductor market, has reclaimed its position as the world’s most valuable company by market capitalization.

The semiconductor sector, briefly shaken by fears of an AI infrastructure bubble, is climbing again, fueled by the strong earnings of Big Tech firms and renewed hopes for improved U.S.-China relations.

Nvidia closed at $141.22 on the Nasdaq on Tuesday, up 2.8 percent from the previous day. Its market value rose to $3.444 trillion, surpassing that of Microsoft, which gained 0.22 percent that day and reached $3.441 trillion.

This marks the first time in about four months that Nvidia has returned to the No. 1 spot, which it last reached on Jan. 24.

Dominating the high-end chip market essential for AI data centers, Nvidia took a direct hit when U.S. President Donald Trump blocked exports of the company’s H20 AI chips to China. Its shares plunged to a 12-month low of $94 on April 4.

While Nvidia exceeded its projected profit in the first quarter, the company incurred a $4.5 billion write-down due to the export curbs.

The Nvidia logo is displayed at the Taipei Music Center in Taipei, Taiwan, on May 19, where Nvidia CEO Jensen Huang delivered the first keynote speech of Computex 2025. [AFP/YONHAP]

However, investor sentiment shifted after the White House recently signaled the possibility of a phone call this week between Trump and Chinese President Xi Jinping. With the potential easing of U.S.-China trade tensions, Nvidia emerged as the company poised to benefit the most, driving the stock rebound.

Last month, Dan Ives, an analyst at Wedbush Securities, said China-U.S. trade progress is setting up a “dream scenario” for the tech sector, with Nvidia as its biggest winner.

Concerns about AI infrastructure investment are also easing. Although the AI bubble narrative previously caused some Big Tech firms to hesitate, strong first quarter earnings in AI-related business have reignited the investment race. Amazon plans to invest $100 billion in AI and cloud infrastructure this year, up 20.5 percent from $83 billion last year.

A Microsoft logo is pictured a day after Microsoft's $26.2 billion purchase of LinkedIn in Los Angeles on June 14, 2016. [REUTERS]

Microsoft, which had scaled back AI data center investments, announced a renewed $80 billion investment in AI infrastructure after posting a 33 percent year-over-year increase in first quarter cloud revenue. On the Nasdaq that day, major semiconductor stocks also rose, AMD by 2.34, Intel by 2.79, Micron Technology by 4.15 percent and Broadcom by 3.27 percent.

Nvidia’s return to the top is expected to benefit its partner companies. At a shareholder meeting the previous day, TSMC Chairman and CEO Che Chia Wei forecast record earnings for year, stating that AI demand remains strong.

If U.S.-China trade tensions ease and AI chip demand grows, SK hynix, which supplies high bandwidth memory (HBM), and Samsung Electronics, which provides seventh-generation graphic double data rate memory for low-spec chips bound for China, are also likely to benefit.

As of 11:30 a.m. Wednesday, SK hynix shares were trading at around 220,000 won ($160.76), up 6.39 percent from the previous day, while Samsung Electronics was up 1.23 percent to around 57,500 won.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY LEE GA-RAM [[email protected]]