Nvidia is on the verge of making history as the first company to reach a $5 trillion market valuation, following a surge in its stock price driven by record demand for artificial intelligence (AI) chips and new government partnerships.
Shares of the Santa Clara–based tech giant rose more than 3% in premarket trading on Wednesday after CEO Jensen Huang announced $500 billion in AI chip orders and plans to build seven new supercomputers for the U.S. government. The rally underscores investor confidence in Nvidia’s central role in the global AI revolution.
From Gaming Chips to AI Powerhouse
Nvidia’s transformation from a niche graphics processor maker into the backbone of the AI industry has been nothing short of extraordinary. Its H100 and Blackwell processors power major language models used by companies such as OpenAI and xAI, and the firm’s valuation now exceeds the entire cryptocurrency market.
Nvidia’s stock has climbed nearly 50% so far this year, outpacing rivals and leaving the rest of the “Magnificent Seven” tech stocks far behind. A $5 trillion valuation would place Nvidia above Apple, Microsoft, and Alphabet, cementing Huang’s position as one of Silicon Valley’s most influential figures.
Strategic Moves and New Partnerships
Alongside its government supercomputer plans, Nvidia announced a $1 billion investment in Nokia, forming a strategic partnership to develop next-generation 6G technology. The deal highlights Nvidia’s expanding influence beyond AI chips, positioning it at the intersection of computing and telecommunications.
Market Momentum and Caution
Nvidia’s meteoric rise has sparked both admiration and concern. Analysts say the company’s surge reflects investor faith in relentless AI spending, but some warn of overheated valuations and the risk of an AI-driven market bubble. Financial institutions such as the IMF and Bank of England have recently cautioned that a downturn in AI enthusiasm could ripple through global markets.
A Geopolitical Balancing Act
Nvidia’s dominance has also drawn attention from regulators. U.S. export restrictions on advanced chips have made the company a central player in Washington’s efforts to curb China’s access to cutting-edge AI technology. During a recent developer event, Huang praised U.S. tech investment policies but also cautioned that excluding China could limit access to half of the world’s AI developers.
What’s Next
Nvidia’s rapid rise shows no signs of slowing, but expectations are sky-high. The company is scheduled to report its next quarterly earnings on November 19, which could further shape its standing in the global tech landscape.
