Nvidia Becomes the First Company to Exceed a Value of 5 Trillion Dollars

SadaNews - Nvidia, the chip-making company, made history today, Wednesday, as the first company to exceed a market value of 5 trillion dollars, driven by a series of impressive gains that solidified its position in the global artificial intelligence sector.

This achievement highlights Nvidia's rapid transformation from a company specialized in designing graphics processing units to a key player in the artificial intelligence sector.

Since the launch of the ChatGPT bot in 2022, Nvidia's stock has jumped over 12 times, fueling the rush for artificial intelligence tools that have driven the S&P 500 index to record high levels.

This new achievement, which comes just 3 months after Nvidia surpassed the threshold of 4 trillion dollars, exceeds the market value of all cryptocurrencies and is equivalent to about half the size of the Stoxx 600 European index.

The stock of the company, based in Santa Clara, California, rose by 4.6% following a series of recent announcements that bolstered its dominance in the AI race.

Nvidia's CEO, Jensen Huang, revealed on Tuesday that there are orders for artificial intelligence chips worth 500 billion dollars, and he stated that the company plans to build seven new supercomputers for the U.S. Department of Energy.

Nvidia's stock closed yesterday evening on the New York Stock Exchange up by 5%, adding more than 230 billion dollars to the company's market value, bringing its total value to 4.89 trillion dollars after briefly touching 4.94 trillion dollars.

Nvidia is at the heart of the global spread of artificial intelligence, making deals at a time when the world is experiencing a trade war between the United States and China that may determine which technologies produced by the countries will be most widely used worldwide.

The company's stock, based in California, has risen by 50% this year, and it surpassed a market value of 4 trillion dollars for the first time last July.

Spending on Artificial Intelligence

Reuters quoted Michael Brown, the chief research strategist at Pepperstone, saying: "In many ways, everything that could have gone right for the company has gone right over the past 24 hours."

Analysts state that the rise in the company’s shares reflects confidence in continued spending on artificial intelligence, even as some warn of inflated valuations. Its huge weight in the S&P 500 index and NASDAQ gives it tremendous leverage in global markets, and its high valuation raises expectations, leaving little room for disappointment.

The company is set to announce its quarterly results on November 19.

Nvidia will build the largest supercomputers planned in collaboration with Oracle, and the computer will feature 100,000 of the advanced Blackwell chips produced by Nvidia.

Keith Lerner, Chief Investment Officer and Chief Market Strategist at Truist Advisory Services, said: "We never imagined a market cap of 5 trillion dollars a few years ago. The market is definitely betting heavily on the idea that artificial intelligence will be transformative.”

Trump's Meeting with Xi

The rise in Nvidia's shares on Tuesday came after U.S. President Trump stated he expects to speak with his Chinese counterpart, Xi Jinping, during their anticipated meeting tomorrow, Thursday, in South Korea, regarding the company's Blackwell chip.

Months ago, Trump had mentioned he was considering allowing Nvidia to export a reduced version of its Blackwell processor to China, and there is hope that this deal may be on the table.