October 31: Nvidia on Wednesday became the world’s first company to reach a market value of $5 trillion, cementing its dominance in the artificial intelligence revolution that has fueled one of the strongest rallies in Wall Street history.
Shares of the U.S. chipmaker rose as much as 5.6% to above $212, lifted by investor optimism over its sales in China and a surge in global demand for its AI processors. The milestone comes just three months after Nvidia hit the $4 trillion mark, underscoring its meteoric rise from a niche graphics-chip designer to the most valuable company on the planet.
Nvidia’s market capitalization now exceeds the GDP of every country except the United States and China, according to World Bank data, and is worth more than entire sectors of the S&P 500. The company first crossed the $1 trillion threshold in June 2023.
Fueled by partnerships with major AI players including OpenAI and Oracle, Nvidia has become the chief beneficiary of the global spending spree on artificial intelligence infrastructure. Its chips power a vast array of data centers that underpin generative AI models and applications worldwide.
Microsoft and Apple have also recently surpassed $4 trillion in market value, reflecting a broader rally driven by AI enthusiasm. Analysts say AI-related enterprises have accounted for roughly 80% of the U.S. stock market’s gains this year.
Yet the rapid ascent has stirred warnings from global financial institutions about a possible AI bubble. The Bank of England, the International Monetary Fund, and JP Morgan chief Jamie Dimon have all cautioned that valuations may have outpaced fundamentals.
“Of course, this is going to do nothing to dispel fears over an AI bubble, but the market seems keen to march on regardless,” said Danni Hewson, head of financial analysis at AJ Bell, describing Nvidia’s $5 trillion valuation as “a sum so vast the human brain can’t properly get a handle on it.”
Some analysts have questioned whether part of the rise reflects financial engineering, as AI companies invest heavily in one another. Nvidia recently made headlines with a $100 billion investment in OpenAI, the company behind ChatGPT.
Nvidia’s stock briefly dipped in April amid renewed U.S.-China trade tensions under President Donald Trump, but the company has since rebounded sharply, gaining more than 50% so far this year. Trump reversed a U.S. ban on Nvidia’s sales of advanced chips to China in July, under a new deal requiring Nvidia to pay 15% of its Chinese revenues to the U.S. government.
Trump, who is scheduled to meet Chinese President Xi Jinping on Thursday, said the two leaders would discuss Nvidia’s Blackwell AI processors, comments that helped push the stock even higher.
Chief Executive Jensen Huang, who has achieved near-celebrity status among tech investors, announced new partnerships on Tuesday and forecast $500 billion in AI chip orders through next year.
