Nvidia nears record $5 trillion valuation as AI boom fuels rapid growth

Nvidia was set to make history on Wednesday by becoming the first company to notch $5 trillion market value, extending a powerful rally that has cemented its place at the center of the artificial intelligence boom.

 

Shares of the Santa Clara, California-based company jumped 3.1 per cent in premarket trade after CEO Jensen Huang announced $500 billion in AI chip orders and plans to build seven supercomputers for the US government.

 

The milestone marks Nvidia's transformation from a niche graphics-chip maker into the backbone of the global AI industry, vaulting past Apple, Microsoft and Alphabet and turning Huang into a Silicon Valley icon.

 

A $5 trillion valuation would also mean Nvidia's market value will exceed that of the entire cryptocurrency market and equal about half the total value of the pan-European Stoxx 600 index.

 

The company hit a $4 trillion valuation in July, marking a pace of growth rarely seen in modern markets.

 

"In many ways, everything that could have gone right for the firm, has gone right over the last ... 24 hours," said Michael Brown, senior research strategist at Pepperstone.

 

Analysts say its surge reflects faith in relentless AI spending, though some warn of overheated valuations. Its massive weighting in the S&P 500 and Nasdaq 100 gives it outsized sway over global markets, while its towering valuation also raises expectations and leaves little room for disappointment.

 

The company is scheduled to report quarterly results on November 19.

 

GEOPOLITICAL BARGAINING CHIP

 

Nvidia's dominance has drawn global regulatory scrutiny, with US export curbs on advanced chips making it a key pawn in Washington's strategy to limit China's access to AI technology.

 

"Nvidia clearly brought their story to D.C. to both educate and gain favor with the US government," said Bob O'Donnell of TECHnalysis Research.

 

"They managed to hit most of the hottest and most influential topics in tech." The developer conference on Tuesday also served as a platform for Huang to walk a geopolitical tightrope.

 

He praised US President Donald Trump's "America First" policies for accelerating domestic tech investment, while warning that excluding China from Nvidia's ecosystem could limit US access to half of the world's AI developers.

 

Rivals including Advanced Micro Devices and several well-funded startups are seeking to challenge Nvidia's dominance in high-end AI chips, but it remains the industry's top choice.

 

Nvidia's H100 and Blackwell processors power most large language models behind tools like OpenAI's ChatGPT and Elon Musk's xAI. Apple and Microsoft have also topped $4 trillion in market value.