Chip giant Nvidia shares hit a new high and its market capitalization topped $3 trillion

Shares of chip giant Nvidia climbed 5.16% on Wednesday (June 5), closing at a record high of $1,224.40. Although Nvidia still trails tech giant Microsoft in market value, it is now the world's first chip company with a market value of $3 trillion, making it the most valuable semiconductor company in the world.

The strong AI market comes amid surging demand for chips that power AI tasks, adding about $1.8 trillion to Nvidia's market value this year. Nvidia is now worth more than tech giant Apple.

Five years before Apple launched the iPhone, Nvidia surpassed Apple in market value in 2002. At the time, both companies were worth less than $10 billion.

After Wednesday's record, Nvidia shares didn't seem to slow down, rising 0.94 percent, or $11.51, to $1,235.91 in after-hours trading. The stock is up about 147% since the start of the year. Like its stock price movement, Nvidia has big ambitions when it comes to artificial intelligence. CEO Jen-Hsun Huang has previously said that the company even plans to upgrade its AI accelerator every year.

Nvidia is the biggest beneficiary of the takeoff of the AI market. This artificial intelligence boom has given Nvidia a dominant position in the artificial intelligence chip market and put the company on the track to compete for the world's most valuable company. While the chipmaker still trails Microsoft in market value, the way the stock is going and the heat it's getting, many Wall Street analysts believe it's only a matter of time before Nvidia overtakes Microsoft.

Currently, 37 of Tipranks' 40 analysts have a buy rating on Nvidia and three have a hold rating on the stock, with an average one-year price target of $1,205.43.

Apple, which was just overtaken by Nvidia, has struggled this year on concerns about waning demand for its flagship iPhone in China. It was not until mid-May that the stock price rose slightly from its closing price at the end of last year.