Nvidia hits historic $5tn market cap
AI and chips behemoth Nvidia has smashed another record valuation, with its $5tn market cap that puts it well clear of the GDP of Germany – the fourth biggest economy in the world.
Shares in Nvidia jumped up 3.5 per cent in premarket trading, amid a surge in investor enthusiasm for AI.
Nvidia’s surge followed the announcement from chief executive Jensen Huang that the firm will build seven supercomputers for the US Department of Energy, alongside a $500bn chips order.
President Trump has said he will discuss the prospect of Nvidia exports with President Xi of China, indicating a softening stance on the sale of Nvidia’s flagship Blackwell chips in China.
Export controls of these flagship chips has been a key point of contention amid a simmering trade war between Washington and Beijing. Trump said that he is “very optimistic” about the talks.
Germany’s GDP was $4.66tn in 2024, and is projected to grow to $5.1tn in full-year 2025 figures.
Each of the three companies are well clear of the UK’s GDP, which was $3.6tn last year.
Danni Hewson, head of financial analysis at AJ Bell said the valuation is “so vast the human brain can’t properly get a handle on it,” adding”
“It’s only a few months since Nvidia smashed through the $4 trillion mark, which goes to show how much markets have shrugged off tariff tantrums and re-embraced the AI trade. Zooming out a bit, it’s only seven years since Apple became the first trillion-dollar company, and in the US stock market that group has swelled to nine in seven years – all technology stocks except for Berkshire Hathaway.
“Of course, this is going to do nothing to dispel fears over an AI bubble, but the market seems keen to march on regardless. With Microsoft, Meta and Alphabet reporting after the bell today, and Apple and Amazon coming tomorrow, we’ll soon get an idea about whether the tech rally can be justified by earnings growth, for the moment at least.”
Magnificent Seven in ascendance
The ‘Magnificent Seven’ of top tech stocks have been fizzing amid record highs at US market close on Tuesday.
Apple crossed the rubicon into a $4tn valuation, and Microsoft is also back over the threshold.
Microsoft’s rally comes as the Redmond tech giant announced a 27 per cent stake in a commercially reconfigured OpenAI, worth around $135bn, ahead of its earnings report expected at market close on Wednesday.
To have three different companies with market caps in excess of $4tn is a feat that has far outpaced analyst’s expectations.
For context, it has only been seven years since Apple became the first $1tn company in August 2018.
Strong earnings results have so far staved off fears of a bursting AI bubble, with optimism in the sector continuing to swell.
There are still major earnings updates coming up this week from Apple, Alphabet, Amazon, and Meta, opening the door to further share surges.