On Wednesday (29 October), Nvidia (NVDA) made history as the first company ever to top a $5 trillion market valuation at the start of the trading day and maintain it through the close. The company’s explosive growth has been driven by the AI boom, as it makes the chips that are essential to training and deployment of AI models.
Optimism around China boosts shares
The company reached the milestone after comments from President Trump on Wednesday ahead of a planned meeting with CEO Jensen Huang added to optimism around prospects for Nvidia’s sales in China.
Bloomberg reported that Trump told reporters that he and Huang would be “speaking about Blackwells”, referring to the company’s AI chips, a version of which could win approval for export to China.
In its most recent quarterly report on 27 Aug., Nvidia disclosed it realised no sales of its earlier-generation H20 chips into China. In July, the White House announced a deal with Nvidia to permit H20 chip exports to China in exchange for a 15% share of revenue. Nvidia said the arrangement had not yet been finalised.
GTC announcements drive stock gains
Nvidia’s rise on Wednesday also comes after a 5% jump in its stock on Tuesday, sparked by several announcements at its GTC event in Washington, D.C.
Among other announcements, Nvidia revealed it is working with the US Department of Energy to build seven new supercomputers, including one that will use 10,000 Blackwell GPUs.
Other initiatives include a partnership with Uber (UBER) to develop a fleet of self-driving cars and a deal to sell 1,000 GPUs to drugmaker Eli Lilly (LLY). Nvidia also said it is working with Nokia (NOK) to help advance next-generation 6G cellular technology.
The company also announced partnerships with Palantir (PLTR) and Oracle (ORCL), as well as collaborations on a wireless 6G buildout with telecom companies, including Cisco (CSCO) and T-Mobile (TMUS). Also the company highlighted that its AI technology is powering robotics initiatives for companies such as Amazon (AMZN), Foxconn, Caterpillar (CAT), and Belden (BDC).
The company also announced a new open systems architecture, Nvidia NVQLink, to accelerate the development of quantum supercomputers, including partners like Rigetti (RGTI) and IonQ (IONQ).
CEO Jensen Huang highlighted strong demand for Nvidia GPUs and plans for new supercomputers. The company made just over $100 billion in total revenue during the first two quarters of this year.
Strong demand from AI leaders
Companies, including Amazon (AMZN) and Google (GOOG, GOOGL) to Microsoft (MSFT), Meta (META), Oracle (ORCL), and OpenAI, as well as other research labs around the world, are rapidly buying Nvidia’s GPUs to power their huge data centre construction projects as they compete to get ahead in the AI race.
In addition to supplying GPUs, Nvidia has also invested up to $100 billion in OpenAI, which is also one of its most important customers.
Competition is growing
While Nvidia continues to lead the AI chip market, competition is growing.
Rival AMD (AMD) has signed a deal with OpenAI for up to 6 gigawatts worth of AI processors and struck a separate deal with Oracle for 50,000 GPUs.
Qualcomm (QCOM) is also entering the AI data centre market with its own AI accelerator chips. Nvidia’s customers, including Amazon, Google, and Microsoft, are increasingly developing and using their own AI chips.
Nvidia shares rise more than 3%
Shares of Nvidia increased more than 3% on Wednesday. This amazing milestone shows incredible growth for the company, which has evolved from a niche developer of video game processors to an important player in the artificial intelligence boom.
Nvidia’s stock climbs over 50% year-to-date
Nvidia’s stock, which closed up 5% on Tuesday, has gone up more than 50% year to date.
The most recent rise higher comes just after CEO Jensen Huang said Nvidia expects $500 billion in artificial intelligence chip orders and announced the company plan to build seven new supercomputers for the U.S. government.
Nvidia also announced Tuesday a $1 billion stake in Nokia, forming a strategic partnership with the networking company to develop next-generation 6G cellular technology.
U.S. stocks hit record highs amid AI trade
U.S. stocks, driven by the AI trade, climbed to record highs on Tuesday. Tech giants Apple and Microsoft both reached a market value of more than $4 trillion, lifting the major averages.
The rally for U.S. stocks comes amid ongoing concerns over a potential bubble, as AI-driven spending has led to record deals and valuations.
Earlier this month, the International Monetary Fund and Bank of England warned that global stock markets could face trouble if investor enthusiasm for AI wanes.
Industry leaders push back on bubble fears
On Tuesday, Ark Invest CEO Cathie Wood flagged the near-term possibility of a “reality check” on AI valuations — but dismissed concerns of an AI bubble.
“If our expectations for AI … are correct, we are at the very beginning of a technology revolution,” Wood told CNBC on the sidelines of Saudi Arabia’s Future Investment Initiative in Riyadh.
Nvidia vs Rivals
Nvidia dominates the AI market, making it difficult for competitors like AMD and Intel to catch up. A recent report outlines how far ahead the company is compared to others like Advanced Micro Devices and Intel. Nvidia’s GPUs currently make up the majority of chips used in AI training and leave other firms with only a small share of the market.
Can Nvidia’s $5 trillion value last?
The big question for investors is whether Nvidia’s $5 trillion value will last. The answer depends on how much of the future AI infrastructure market Nvidia can control.
Is Nvidia in a bubble?
Most analysts remain confident for now. Out of 80 analysts who track Nvidia, 73 rate the stock a “buy.” They believe global AI spending is still in its early stages, with forecasts suggesting annual AI infrastructure investment could reach $3 to $4 trillion by 2030 – about 40% higher each year than current levels. If Nvidia continues to power most of that growth, its current value could be justified by strong long-term earnings.
But not everyone agrees. A few analysts warn that Nvidia’s success relies heavily on its biggest customers. Microsoft, Google, Amazon, Meta, Oracle, and OpenAI are expected to spend around $400 billion on AI this year. If any of these companies slow their spending or rely on their own chips, Nvidia’s growth could slow sharply.
What the next five years could look like
Nvidia’s AI infrastructure revenue is currently around $164 billion annually. That figure could climb to between $1.3 trillion and $2.2 trillion within five years – an 8- to 14-fold increase.
If these growth rates stay the same, Nvidia’s stock could go up from about $183 to between $1,300 and $2,100 over the same period. In the most optimistic forecasts, prices could even hit $3,100, a compound annual growth rate of more than 60%. Some analysts even see a possible $8 trillion valuation, but that depends on Nvidia expanding into newer markets like Omniverse and Automotive AI to reduce its reliance on hyperscaler demand.
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