Microsoft and Nvidia are the odd $4 trillion power couple

Nvidia and Microsoft could soon become $4 trillion companies, forming the most exclusive club in the stock market.

- Dan Gallagher & Asa Fitch

Nvidia and Microsoft could soon become $4 trillion companies, forming the most exclusive club in the stock market. Enthusiasm over artificial intelligence is what got both of them there. But for Microsoft, the story is more complicated—and the payoff fuzzier. A much bigger company than Nvidia in terms of annual revenue, Microsoft also sits in a different spot in the AI value chain. Nvidia is booming because any company that wants to work with AI has to buy its chips first.

Microsoft's boom will depend on the willingness of a high number of the customers it depends on—both businesses and consumers—to pay a premium for AI services.

For that to happen, AI will have to become a more transformative corporate tool fully woven through everyday life—much like Microsoft's Windows operating system or Word office software became decades ago.

Many think that's more a question of "when" than "if." But the "when" still matters after Microsoft's market value has grown by a trillion dollars in less than three months. And, at a market cap of $4 trillion, Microsoft's stock price would command the highest multiple against projected earnings that it has sported in more than 20 years.