Nvidia is poised to make history on Wednesday by becoming the first firm to reach $5 trillion in market value, continuing a strong surge that has solidified its position at the epicenter of the artificial intelligence boom.
Following CEO Jensen Huang’s announcement of $500 billion in orders for AI chips and plans to construct seven supercomputers for the US government, shares of the Santa Clara, California-based company surged 3.1% in premarket trading.
By surpassing Apple, Microsoft, and Alphabet and transforming Huang into a Silicon Valley icon, the milestone signifies Nvidia’s metamorphosis from a specialized graphics chip manufacturer into the core of the worldwide AI sector.
Nvidia’s market value would surpass that of the whole cryptocurrency market and equal around half of the overall value of the pan-European Stoxx 600 index if it were valued at $5 trillion.
In July, the corporation reached a valuation of $4 trillion, demonstrating a growth rate uncommon in contemporary markets.
“In many ways, everything that could have gone right for the firm has gone right over the last … 24 hours,” stated Pepperstone senior research strategist Michael Brown.
Although others warn about overheated values, analysts believe its climb demonstrates optimism in unrelenting AI spending.
It has an enormous influence over international markets due to its enormous weighting in the S&P 500 and Nasdaq 100.
Its enormous valuation also boosts expectations and provides little tolerance for disappointment.
On November 19, the business is expected to release its quarterly results.
CHIP FOR GEOPOLITICAL BARGAINING
Nvidia is a crucial pawn in Washington’s plan to restrict China’s access to AI technology, and its supremacy has drawn regulatory attention from around the world due to U.S. export restrictions on cutting-edge semiconductors.
“Nvidia clearly brought their story to D.C. to both educate and gain favor with the U.S. government,” TECHnalysis Research’s Bob O’Donnell stated.
“They managed to hit most of the hottest and most influential topics in tech.”
Huang was able to walk a geopolitical tightrope on Tuesday at the developer conference.
He warned that keeping China out of Nvidia’s ecosystem might restrict U.S. access to half of the world’s AI developers while applauding U.S. President Donald Trump’s “America First” plans for boosting domestic tech investment.
Although several well-funded companies and rivals, such as Advanced Micro Devices, are attempting to challenge Nvidia’s dominance in high-end AI processors, Nvidia remains the industry leader.
The majority of huge language models used in programs like Elon Musk’s xAI and OpenAI’s ChatGPT are powered by Nvidia’s H100 and Blackwell processors.
Additionally, the market valuation of Apple and Microsoft has surpassed $4 trillion.
