Nvidia, the graphics processing unit (GPU) giant, continues its meteoric rise, reaching a record high stock price yesterday. This surge in value has propelled Nvidia’s market capitalization to a staggering new level: over $3.34 trillion. That’s right, a single company is now worth more than the combined value of all publicly traded companies on the Toronto Stock Exchange, which sits around $3.2 trillion.

This isn’t just a one-day wonder. Nvidia’s stock has nearly tripled in 2024, fueled by surging demand for its high-performance chips across various sectors. From powering the latest gaming rigs to driving artificial intelligence applications, Nvidia’s technology is in high demand. The company recently reported record quarterly revenue, further bolstering investor confidence.

While Nvidia’s growth is exceptional, it’s not entirely unprecedented. We’ve seen similar rocket ship trajectories with other tech giants. Tesla, the electric vehicle and clean energy leader, saw its stock skyrocket in recent years before experiencing a correction. However, Tesla’s market cap still sits at a cool $1.2 trillion, a testament to its disruptive potential.

Another example of rapid growth is Zoom Video Communications (ZM). The video conferencing company saw its stock surge in 2020 as the world shifted to remote work and communication due to the pandemic. Zoom’s stock price skyrocketed over 700% in that year. While the company hasn’t maintained that blistering pace, it still demonstrates the potential for tech companies to experience explosive growth.

So, what’s next for Nvidia? Analysts remain bullish, citing the company’s strong position in the booming AI and data center markets. However, some caution that Nvidia’s high valuation makes it susceptible to market corrections.

Only time will tell if Nvidia can sustain its incredible growth. Regardless, the company’s current performance is a remarkable display of innovation and market dominance in the ever-evolving tech landscape.

While Nvidia’s ascent is impressive, it’s important for investors to approach the situation with a cool head. Chasing stocks at all-time highs can be risky, especially if the valuation already seems stretched. Investors should carefully consider their own risk tolerance and investment goals before making any decisions. Keep in mind, the average investor has a tendency to buy high and sell low, which is in fact the opposite strategy they’re trying to deploy.

A better approach might be to research Nvidia’s fundamentals and future prospects. Can the company maintain its growth trajectory? Are there any potential headwinds on the horizon, like a chip shortage or economic downturn? For long-term investors, a well-diversified portfolio that includes some exposure to the tech sector can be a good way to capitalize on growth potential without putting all your eggs in one basket.