Nvidia made history on Wednesday by becoming the first company to reach a market capitalization of US$5-trillion, cementing its position as the undisputed backbone of the global artificial intelligence industry. This stunning rally underscores the company’s swift transformation from a niche designer of graphics chips into a dominant tech giant, and it solidifies CEO Jensen Huang as a leading Silicon Valley figure.
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The milestone comes just three months after Nvidia breached the $4-trillion mark. The company’s current valuation now surpasses the total global cryptocurrency market value and is equivalent to roughly half the size of Europe’s benchmark equities index, the Stoxx 600.
Since the launch of ChatGPT in late 2022, Nvidia’s share price has climbed an astonishing 12-fold. This AI frenzy has helped propel the S&P 500 to record highs, simultaneously igniting a public debate over whether the rapid appreciation of tech valuations is sustainable or leading to a potential market bubble.
Analysts view the valuation as a statement of Nvidia’s strategic importance. Matt Britzman, senior equity analyst at Hargreaves Lansdown, noted that the company has evolved “from chip maker to industry creator.” He added that the market continues to underestimate the scale of the opportunity, and Nvidia remains one of the premier ways to play the AI theme.
Shares of the Santa Clara-based company rose 4.6% following a string of recent announcements that solidified its dominance. CEO Huang recently unveiled $500-billion in new AI chip orders and announced plans to build seven supercomputers for the US government.
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Nvidia’s advanced chips, particularly the H100 and Blackwell processors, have become essential engines for the large language models that power tools like ChatGPT and Elon Musk’s xAI. This technological supremacy has also made its products a flashpoint in the growing tech rivalry between the US and China, with Washington’s export controls targeting high-end chip sales. US President Donald Trump is reportedly set to discuss the Blackwell chip’s status with Chinese President Xi Jinping.
The rally has dramatically increased the fortune of CEO Jensen Huang, who has led Nvidia since co-founding it in 1993. His personal stake in the company is now valued at approximately $179.2-billion, making him the eighth-richest person in the world.
While Nvidia remains the clear frontrunner, its achievement is part of a wider trend. Big Tech peers like Apple and Microsoft have also recently crossed $4-trillion in market value. This collective rally reflects investor confidence in unrelenting AI spending. However, critics like Matthew Tuttle, CEO of Tuttle Capital Management, caution that the AI ecosystem currently relies on a few dominant players financing each other’s capacity, warning that this flywheel could seize “the moment investors start demanding cash-flow returns instead of capacity announcements.” The heavy influence of these tech companies on the S&P 500 and Nasdaq 100 ensures their performance continues to shape global market trends.
