Chipmaker Nvidia hits $5 trillion valuation

In the wake of a global artificial intelligence arms race, Nvidia is the first company to surpass $5 trillion in market value.

Three months after the chipmaker’s stock exceeded $4 trillion, the company surged on Wednesday.

The milestone represents the company’s swift transition from a burgeoning graphics-chip company to the backbone of the global AI sector, elevating CEO Jensen Huang to the top of Silicon Valley, and positioning its advanced chips as a hot button in the tech rivalry between the US and China.

Nvidia’s shares have increased 12-fold since ChatGPT’s launch in 2022 as the S&amp, P 500’s AI boom pushed its shares to record highs, sparking a debate over whether frothy tech valuations could create the next big bubble.

The Stoxx 600 index, Europe’s benchmark equities index, would be roughly half as large as the new milestone, surpassing the total market value for cryptocurrency.

According to Matt Britzman, senior equity analyst at Hargreaves Lansdown, Nvidia’s $5 trillion market cap is more than just a milestone, it’s a statement. “Nvidia has gone from being a chip maker to being an industry creator,” Britzman said.

“Nvidia remains one of the best ways to play the AI theme, and the market continues to underestimate the size of the opportunity.”

On Tuesday, Huang announced his plans to build seven supercomputers for the US government and announced $ 500 billion in AI chip orders.

President Donald Trump is scheduled to meet with Chinese President Xi Jinping on Thursday to discuss Nvidia’s Blackwell chip. Due to Washington’s export restrictions, the high-end chip sales have been a major source of contention between the two parties.

CEO Huang’s stake in Nvidia would be roughly $ 179.2 billion at current prices, according to Reuters calculations and regulatory filings. According to Forbes’ list of billionaires, he is the eighth-richest person in the world.

Huang, a native of Taiwan and a child of the US, has led Nvidia since 1993 when it was founded. The company’s H100 and Blackwell processors, under his leadership, have evolved into the foundation of large-language computers that power tools like ChatGPT and XAI.

Big Tech competitors like Apple and Microsoft have recently exceeded $4 trillion in market value, despite Nvidia’s clear lead in the AI race.

Analysts believe the increase in investor confidence in unrelenting AI spending is due to rising prices, but some analysts warn that the stock may be in decline.

A few dominant players are relying on one another to finance their own capacity for AI’s current expansion. Some of these flywheels could seize as soon as investors start demanding cash-flow returns, according to Matthew Tuttle, CEO of Tuttle Capital Management.

On November 19, Nvidia will release quarterly results.

Regulatory pressures

Due to the company’s dominance, US export restrictions on advanced chips have raised questions in international law enforcement.

According to Bob O’Donnell of TECHnalysis Research, “NVidia clearly brought their story to DC to both educate and gain favor with the US government.” They “recognized the most hot and influential areas of technology”

Huang could walk a geopolitical tightrope at the developer conference on Tuesday.

He praised Trump’s “America First” policies, which have increased domestic tech investment, and warned that Nvidia’s ban on China from its ecosystem could impose a cap on US access to half of the world’s AI developers.

Nvidia remains the top choice in the market despite rivals, including Advanced Micro Devices (AMD) and a number of well-funded startups, who are trying to challenge its position as the leader in high-end AI chips.