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Nvidia surpassed $5 trillion in market capitalization Wednesday, marking the first time any company has reached the milestone as Wall Street continues betting heavily on artificial intelligence's economic potential.
The chipmaker's shares climbed 4.91 percent to $210.90 at the opening bell, propelling its valuation beyond the gross domestic product of France or Germany. The Santa Clara, California-based company now exceeds the combined market value of Tesla, Meta and Netflix.
Only Microsoft and Apple approach Nvidia's scale, with each valued at slightly more than $4 trillion.
The rally follows robust sales figures and a string of corporate partnerships, including a telecommunications deal with Finland's Nokia announced Tuesday. Market observers also cite expectations that Nvidia may soon resume sales to China, currently blocked by government restrictions and national security concerns.
"While it's almost unfathomable to think about a company reaching this milestone, it comes from a company with so many operational efficiencies that seems to announce massive deals on a daily or weekly basis," said Art Hogan, chief market strategist at B. Riley Wealth Management.
Nvidia dominates the market for graphics processing units that run generative AI systems powering ChatGPT and similar large language models. The company specialized in GPUs in the late 1990s, transitioning from video game applications to cloud computing as that sector emerged.
CEO Jensen Huang is expected in South Korea this week for meetings on the sidelines of the APEC summit, where President Donald Trump will meet with Chinese President Xi Jinping. AI development is anticipated to feature in their discussions.
The Trump administration has signaled interest in a more flexible approach to AI chip sales to Beijing, though the position faces resistance from lawmakers advocating stricter technology export controls amid ongoing U.S.-China trade tensions.
Recent weeks have seen Nvidia announce major investments, including plans to commit up to $100 billion to OpenAI over several years. The company also pledged $5 billion to Intel, aligning with administration efforts to expand domestic semiconductor manufacturing.
The AI sector's rapid valuation growth — including OpenAI's $500 billion private market valuation — has prompted comparisons to the late-1990s internet bubble that burst in 2000.
Sam Stovall, chief investment strategist at CFRA Research, said Nvidia's growth projections remain strong and that news surrounding the company should "only get better, not worse."
He cautioned, however, that "valuations are elevated... and could therefore be vulnerable to any upsetting news."
Hogan noted the company is "largely ahead of any competitor who finds it hard to catch up in the world that Nvidia lives in."
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