Tech giant Nvidia reached a historic milestone on Wednesday, becoming the world's first company to surpass a $5 trillion market valuation. The California-based firm saw its stock rise by nearly 5% at the opening of trading on Wall Street, pushing its market capitalization beyond that of entire national economies, including France and Germany.
This surge places Nvidia ahead of major corporations such as Tesla, Meta, and Netflix combined. Microsoft and Apple, previously the only companies valued over $4 trillion, now trail behind Nvidia's unprecedented climb.
The company’s growth has been driven by soaring demand for its AI-focused chips, continued strong sales, and a series of high-profile deals. This includes a new partnership with Nokia announced Tuesday and potential future access to the Chinese market.
"While it's almost unfathomable to think about a company reaching this milestone, it comes from a company with so many operational efficiencies," said Art Hogan of B. Riley Wealth Management.
CEO Jensen Huang is expected to travel to South Korea this week for the APEC summit, where he will attend meetings coinciding with a planned discussion between US President Donald Trump and Chinese President Xi Jinping. AI development and trade tensions are expected to feature prominently.
Due to existing restrictions, Nvidia chips are currently not sold in China. However, the Trump administration is reportedly exploring a more nuanced approach to exporting AI technologies, amid ongoing debate within the US political landscape.
Nvidia recently announced plans to invest $100 billion in OpenAI and an additional $5 billion in Intel, aligning with efforts to bolster US-based semiconductor manufacturing.
The company’s dominance in the field of GPUs, vital to generative AI models such as ChatGPT, stems from decades of expertise since pivoting from gaming to cloud computing in the late 1990s.
Despite concerns of an AI market bubble, Nvidia’s trajectory appears strong. "Valuations are elevated... and could therefore be vulnerable to any upsetting news," cautioned CFRA analyst Sam Stovall. "But news surrounding the company will only get better, not worse."
With OpenAI now valued at $500 billion, the AI sector continues to reshape the global tech landscape, and Nvidia remains at the forefront of this transformation.