(Reuters) -Nvidia's ( NVDA ) stock hit a record high on Wednesday, and the chipmaker reclaimed the crown as the world's most valuable company after an analyst said the chipmaker was set to ride a "Golden Wave" of artificial intelligence.

Shares of the Santa Clara, California-based company rose over 4% to a record high of $154.10. The rise sent Nvidia's ( NVDA ) stock market value to $3.76 trillion, overtaking Microsoft ( MSFT ), which was last valued at $3.65 trillion following a 0.2% increase in its stock.

Fueling Nvidia's ( NVDA ) latest rally, Loop Capital lifted its price target for the designer of high-end AI processors to $250 from $175, while maintaining its "buy" rating. 

"Our work suggests we are entering the next 'Golden Wave' of Gen AI adoption and NVDA is at the front-end of another material leg of stronger than anticipated demand," Loop Capital analyst Ananda Baruah wrote in a client note.

Nvidia's ( NVDA ) latest gains reflect the U.S. stock market's return to the "AI trade" that fueled massive gains in chip stocks and related technology companies in recent years on optimism about the emerging technology.

Nvidia ( NVDA ) recently traded at about 30 times analysts' expected earnings for the next 12 months, below its average of about 40 over the past five years, according to LSEG data. That relatively modest price-to-earnings valuation reflects steadily increasing earnings estimates that have outpaced Nvidia's ( NVDA ) sizable stock gains.

Nvidia ( NVDA ), Microsoft ( MSFT ) and Apple ( AAPL ) have traded places several times as the world's most valuable company over the past year, with Microsoft ( MSFT ) leading recently after overtaking Nvidia ( NVDA ) in early June.

Apple's ( AAPL ) stock rose 0.4% on Wednesday, putting its value at $3.0 trillion.

Nvidia ( NVDA ) has now rebounded over 60% from its closing low on April 4, when Wall Street was reeling from President Donald Trump's global tariff announcements. U.S. stocks, including Nvidia ( NVDA ), have recovered on expectations the White House will reach trade deals to soften the tariffs.

The S&P 500 technology sector index was last up 0.9% at an all-time high. It has now gained almost 6% in 2025.