Nvidia, a global leader in artificial intelligence (AI) and chip-making, is projected to become the world’s first company to achieve a $5 trillion valuation. This significant milestone appears imminent as the company's shares surged over 3% in pre-market trading on Wednesday.
According to a report by the Financial Times, Nvidia's stock has experienced a remarkable climb of nearly 50% year-to-date. This surge is largely attributed to the escalating demand for its Blackwell-based chips. Furthermore, the technology giant has secured substantial partnerships across key sectors including data centers, robotics, and cloud computing.
Nvidia's Blackwell GPU architecture, unveiled earlier this year, continues to be a driving force behind the company's dominance in AI and high-performance computing. This advanced technology is being widely adopted by enterprise data centers, public cloud infrastructure, robotics platforms, and quantum research laboratories.
Nvidia has successfully transformed its identity from a specialized graphics processor manufacturer to a pivotal infrastructure provider in the burgeoning AI era.
Recently, CEO Jensen Huang announced that the company anticipates receiving $500 billion in AI chip orders within the next year. He also revealed plans for Nvidia to construct seven new AI supercomputers for the U.S. government, further solidifying Nvidia's critical role in national-scale computing infrastructure.
The tech giant's integrated hardware, network, and software platforms are foundational to the emerging AI economy. Nvidia is actively promoting its adoption as global carriers, cloud providers, and governments accelerate their efforts to build capacity for AI workloads.
“We’re witnessing the next industrial revolution, and this time, the factories are data centres,” Huang stated.
For Nvidia, surpassing the $5 trillion valuation mark would profoundly redefine its standing among major U.S. tech giants, including Apple, Microsoft, and Alphabet. It also represents a significant testament to the company's impact on AI computing, infrastructure, and chip production.
Nvidia's Ascent to Becoming the World's Most Valuable Company
In June 2024, Nvidia briefly held the title of the world's most valuable company before being surpassed by Microsoft and Apple. Later, in October 2024, the chipmaker's stock market value briefly touched $3.53 trillion, slightly edging out Apple's $3.52 trillion.
In July, the company achieved a significant milestone by crossing the $4 trillion valuation mark, becoming the first company globally to reach this level and reinforcing its dominant position. The company is now poised to reach and exceed the $5 trillion valuation, propelled by its advancements in AI computing and chip production.
Prior to these recent achievements, the company experienced a period of decline before experiencing a substantial rise in both revenue and valuation.
In 2020, Nvidia reported earnings of $2.796 billion and an annual revenue of $10.918 billion, reflecting a 6.8% year-over-year decrease. At that time, its shares were trading at over $531 per share, with a market capitalization valued at more than $328.7 billion in January 2021.
For the second half of 2020, the chip manufacturer reported sales of $3.87 billion, marking a 50% increase compared to the same period in 2019. This surge was attributed to increased sales and a higher public demand for computer technology.
By May 2023, Nvidia had surpassed $1 trillion in market valuation, growing to $1.2 trillion by the following November. Its strength, scale, and market capitalization led to its inclusion as one of Bloomberg’s “Magnificent Seven,” representing the seven largest companies in the stock market.
In June 2024, the company's market capitalization reached $3 trillion for the first time, making it the world's third most valuable company. This development enhanced the accessibility of its shares to investors and followed a substantial increase in the company's value, driven by the growing demand for its AI-focused semiconductors.
Nvidia became the world's most valuable company on June 18, 2024, surpassing Microsoft and Apple, after its market capitalization exceeded $3.3 trillion.
After temporarily falling to third place behind Microsoft and Apple, Nvidia steadily climbed back to become the world's largest technology company in October 2024. Now, a year later, it is on the verge of crossing the $5 trillion valuation mark.
This significant development coincides with a $1 billion strategic alliance with Nokia. Announced on Tuesday, this collaboration aims to empower communication service providers (CSPs) to deploy AI-powered 5G-Advanced and 6G networks.
Through this deal, Nvidia will invest $1 billion in the Finnish vendor, becoming one of its largest shareholders.