Danielle KayeBusiness reporterReutersNvidia CEO Jensen Huang, pictured at an event in Taiwan in 2024Nvidia has hit a new milestone, becoming the first company in the world to reach a market value of $5tn (£3.8tn).The US chip-maker has rapidly climbed from a niche graphics-chip manufacturer to an AI titan, as euphoria about the potential of artificial intelligence keeps driving demand for its chips and propelling 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 just three months ago.Shares in the chip-maker rose as much as 5.6% 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 – the biggest winner in the AI spending spree – has soared past its rivals in the technology sector. It has struck deals with leading 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 broader tech rally fuelled by optimism on Wall Street about AI spending.AI-related enterprises have accounted for 80% of the stunning gains in the American stock market this year.But 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”.Some sceptics are now publicly asking whether the rapid rise in the value of AI tech companies may be, at least in part, the result of what they call “financial engineering”. Nvidia’s share price dipped in April when global 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 strong growth since the spring.It share price has risen more than 50% so far this year.Investors have been focused on Nvidia’s access to China, which is the biggest 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% of its Chinese revenues to the US government in an unprecedented deal struck in the summer.Trump, who is expected to meet with Chinese leader Xi Jinping on Thursday, said on Wednesday that the two leaders will discuss Nvidia’s Blackwell artificial intelligence processors. His comments helped nudge Nvidia’s stock even higher.Jensen Huang, Nvidia’s chief executive who has achieved celebrity status amid the company’s meteoric rise, announced a flurry of partnerships on Tuesday. He said he expects $500 billion in AI chip orders through next year.
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Nvidia becomes world’s first $5tn company
