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Nvidia hits $4 trillion market cap, cementing tech’s dominance in stock market

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Nvidia Corp’s remarkable rise to a $4 trillion market valuation highlights its pivotal role in the stock market and the broader technology sector. The AI chipmaker’s shares have surged roughly 1,350% since October 2022, with a 22% gain so far in 2025, outperforming the 6% rise of the S&P 500.

The milestone was reached during morning trading on Wednesday, about 13 months after Nvidia first hit the $3 trillion mark. This rapid appreciation has made Nvidia the largest single stock by market value in the S&P 500, where it now accounts for around 7.5% of the index—more than any other company.

Nvidia’s influence is even more pronounced in tech-heavy indexes like the Invesco QQQ Trust ETF and the Philadelphia Semiconductor Index, though it has a smaller presence in price-weighted indexes such as the Dow Jones Industrial Average.

Microsoft ($3.7 trillion) and Apple ($3.1 trillion) trail Nvidia but are closing in on the $4 trillion threshold, underscoring the dominance of tech giants. The top seven companies in the S&P 500—also including Amazon, Alphabet, Meta Platforms, and Broadcom—make up about one-third of the index’s total market value.

This surge illustrates the growing dominance of the technology sector, which now represents about one-third of the S&P 500’s market value, nearing levels last seen during the dot-com bubble peak in 2000.

Other standout tech stocks in 2025 include Microsoft (+19%), Oracle (+40%), and Palantir (+88%).

America’s Largest Power Grid Struggles to Meet Surging AI and Data Center Demand

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America’s largest power grid, managed by PJM Interconnection and covering 13 states from Illinois to Tennessee, is facing significant strain as data centers and AI chatbots rapidly increase electricity consumption—outpacing the grid’s ability to build new power plants. This has led to sharp electricity price increases, with bills projected to rise over 20% this summer in some areas.

The rising costs stem from an 800% jump in prices at PJM’s annual capacity auction last year, which sets rates to ensure electricity availability during extreme weather. These price hikes trickle down to consumers and have sparked political and organizational upheaval: Pennsylvania’s governor has threatened to pull the state from PJM, the grid’s CEO announced he will step down, and key board members have been replaced.

The auction is scheduled again soon, with expectations of further price rises, driven by a growing mismatch between supply and demand. Aging power plants are retiring faster than new ones come online, and PJM has delayed auctions and paused accepting applications for new power plants—actions that experts say exacerbate the shortage.

Pennsylvania Governor Josh Shapiro emphasized the need for transparency, speed, and cost control from PJM. The grid operator attributes the supply crunch partly to external factors, such as state policies that closed fossil fuel plants prematurely and soaring demand from data centers, especially in “Data Center Alley” in Northern Virginia.

Although PJM has cleared about 46 gigawatts of new power projects in recent years—enough for 40 million homes—many face delays due to local opposition, supply chain issues, and financing problems. PJM lost more than 5.6 gigawatts of power capacity in the last decade and added only about 5 gigawatts in 2024, less than smaller grids in California and Texas.

Demand from data centers alone is expected to increase by 32 gigawatts by 2030, with AI-related workloads significantly contributing to the surge.

The power crunch intensified after PJM paused processing new power plant applications in 2022, overwhelmed by renewable project requests, and after AI chatbots like ChatGPT gained popularity in 2023, boosting data center energy use. Consumer groups have called for a redo of the 2024 capacity auction, citing unfairly high prices.

In response, PJM implemented reforms including price caps and biannual auctions, and expedited the connection of 51 power projects, but many will not be operational until 2030 or later. For example, the Three Mile Island nuclear plant restart, contracted by Microsoft, won’t come online before 2027.

Experts warn that PJM must improve its processing of new power plant applications to effectively address the supply-demand imbalance and prevent blackouts.

Arm Reports 14-Fold Growth in Data Center Customers Since 2021 Amid AI Boom

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Arm, the chip architecture company owned by SoftBank, has seen its data center customer base soar to 70,000—a 14-fold increase since 2021—according to a company statement shared exclusively with Reuters. This growth underscores Arm’s rising influence in the data center chip market, driven largely by demand linked to generative artificial intelligence computing.

Under CEO Rene Haas, Arm has expanded beyond its traditional strength in mobile and PC markets into data center processors, a sector historically dominated by x86 architectures from AMD and Intel. Arm-based chips are prized for their high performance coupled with low energy consumption, making them attractive for large-scale data centers that require efficient, powerful processing.

The company also revealed a 12-fold increase in startups using its chips since 2021, highlighting its growing footprint in emerging technology firms. Arm has benefited from partnerships with major cloud providers like Amazon AWS, Google, and Microsoft, who have developed custom Arm chips for their expansive infrastructure. For instance, Amazon has introduced multiple generations of Arm-based data center processors since 2018, including those optimized for AI workloads.

While the broader semiconductor market has faced challenges, particularly in PC and mobile segments, Arm’s data center growth remains robust, supported by a swelling developer ecosystem. The number of applications running on Arm machines has doubled to 9 million since 2021, and the developer community has grown by 50% to 22 million.

Despite the positive outlook, Arm has refrained from issuing annual financial guidance, citing ongoing trade uncertainties.