Nvidia has become the first company in the world to reach a market value of $5tn (£3.8tn).
The US chip manufacturer has grown from a graphics-chip designer to an AI company as demand for its chips continues to drive its stock to record highs.
The company reached a market value of $1tn for the first time in June 2023 and hit the $4tn valuation mark three months ago.
Nvidia Hits $5tn valuation milestone as shares rise 5.6% on China sales optimism
Shares in the chip-maker rose as much as 5.6 per cent to more than $212 on Wednesday morning, boosted by investor optimism about Nvidia’s sales in China, which has been a geopolitical flashpoint.
The world’s most valuable company has soared past its rivals in the technology sector. It has struck deals with AI companies including OpenAI and Oracle as its chips continue to power the AI boom.
Nvidia’s value now exceeds the GDP of every country except the US and China, according to data from the World Bank, and is higher than entire sectors of the S&P 500.
Microsoft and Apple have also recently crossed the $4tn valuation mark, reinforcing a tech rally fuelled by optimism on Wall Street about AI spending.
AI-related enterprises have accounted for 80 per cent of the gains in the American stock market this year. Concerns about an AI bubble and whether these companies are overvalued continue to mount as tech stocks hit record after record.
Warnings have come from the Bank of England and the International Monetary Fund, as well as from JP Morgan boss Jamie Dimon, who told the BBC that “the level of uncertainty should be higher in most people’s minds”.
Nvidia market cap exceeds GDP of every country except US and China
AI firms have been investing in one another, creating a web of deals that has been drawing scrutiny.
OpenAI, which brought AI into the consumer mainstream with ChatGPT in 2022, last month secured a $100bn investment from Nvidia.
Nvidia’s share price dipped in April when markets were jolted by US President Donald Trump’s intensifying trade wars. Concerns about Trump’s trade policies linger, but Nvidia’s stock has still seen growth since the spring. Its share price has risen more than 50 per cent so far this year.
Investors have been focused on Nvidia’s access to China, which is the market for its products and has been investing heavily to produce its own high-end chips.
Nvidia had previously been banned from selling its most advanced chips to China, before Trump reversed the ban in July. Nvidia has to pay 15 per cent of its Chinese revenues to the US government in a deal struck in the summer.
