Background on NVIDIA and its Relevance
NVIDIA, a leading chip manufacturer specializing in artificial intelligence (AI), recently achieved an unprecedented milestone by reaching a market capitalization of $5 trillion. This makes NVIDIA the first company to ever surpass this valuation threshold.
NVIDIA’s Rapid Growth
At the beginning of June, NVIDIA was valued at $4 trillion. Now, it has more than doubled its market cap and surpassed the total market value of all cryptocurrencies. The company’s stock has been on an upward trend for five consecutive sessions, with a 15% increase during this period.
Experts’ Perspectives
According to GBM Research, the surge in NVIDIA’s stock price is partly attributed to speculation that U.S. President Donald Trump might authorize the export of the Blackwell chip, even in a less powerful version, to China. This move could potentially narrow the U.S.’s lead in AI and allow China to surpass the U.S. in AI computing capabilities by 2026.
Investor Confidence in AI
Despite concerns about high valuations and potential financial bubbles, investors remain optimistic about AI investments. NVIDIA’s CEO, Jensen Huang, has dismissed the notion of an AI bubble and emphasized the need for increased U.S. energy to sustain industrial growth. He also highlighted that a return to the Chinese market would be a “huge bonus” for the company.
NVIDIA’s Valuation Compared to Global Economies
To grasp the significance of NVIDIA’s valuation, consider that Mexico’s Gross Domestic Product (GDP) for 2024 was $1.8 trillion, making NVIDIA worth approximately 2.3 times Mexico’s annual production.
- NVIDIA’s market cap surpasses several major economies, including:
- Germany: $4.6 trillion
- Japan: $4.02 trillion
- India: $3.9 trillion
- United Kingdom: $3.6 trillion
- France: $3.2 trillion
- Only the United States ($29.2 trillion) and China ($17.7 trillion) have higher GDPs than NVIDIA’s market cap.
NVIDIA Among the “Seven Magnificent” Companies
NVIDIA is part of the group known as the “Seven Magnificent,” which includes Microsoft, Apple, Alphabet, Amazon, Meta, and Tesla. Together, these companies have a combined market value of approximately $23 trillion.
