Nvidia First to Hit $5 Trillion Market Cap, Fueled by AI demand
New York – Nvidia, the leading designer of graphics processing units (GPUs), surged past a $5 trillion market valuation on Wednesday, marking a historic first for any company globally. The milestone underscores the intense investor appetite for companies positioned to benefit from the rapid expansion of artificial intelligence.
Shares of the California-based technology giant rose 5.45% to $211.99 shortly after the opening of trading on Wall Street, pushing its market capitalization above $5.1 trillion. This figure exceeds the gross domestic product of both France and Germany, and surpasses the combined market value of Tesla, Meta (Facebook), and Netflix.
Nvidia’s stock has climbed nearly 60% since the beginning of the year, driven by strong sales of its GPUs, which are essential for powering AI applications. While not the original developer of GPUs, Nvidia strategically focused on the technology starting in the late 1990s, transitioning from video games to cloud computing and establishing itself as a leader in the field.
The company has recently demonstrated its commitment to the AI ecosystem through notable investments. On Tuesday, Nvidia announced a $1 billion investment for a 2.9% stake in Finnish telecom equipment maker Nokia.In late September, the company pledged $100 billion to support OpenAI, the creator of ChatGPT, in building its data centers.
Despite the bullish outlook,some analysts caution against a potential “AI bubble.” Sam Stovall of CFRA, an autonomous financial research company, noted that “valuations are vrey high” and “shares could therefore be vulnerable to any bad news.”
Market intelligence firm Gartner projects global spending on AI to reach approximately $1.5 trillion in 2025, and exceed $2 trillion in 2026, representing nearly 2% of global GDP.