Nvidia nears historic $5 trillion valuation in fresh AI-fueled rally

Shares of the Santa Clara, California-based company jumped 2.8% in premarket trade after CEO Jensen Huang announced $500 billion in AI chip orders and plans to build seven supercomputers for the US government.

Nvidia was set to open above a $5 trillion market value on Wednesday, becoming the first company to reach the milestone after a powerful rally that has made the chip designer the centerpiece of the artificial intelligence boom.

Shares of the Santa Clara, California-based company jumped 2.8% in premarket trade after CEO Jensen Huang announced $500 billion in AI chip orders and plans to build seven supercomputers for the U.S. government.

The milestone marks Nvidia's evolution from a niche graphics-chip maker into the backbone of the global AI industry, vaulting past peers Apple, Microsoft and Alphabet and turning Huang into a Silicon Valley icon.

"In many ways, everything that could have gone right for the firm, has gone right over the last sort of 24 hours," said Michael Brown, senior research strategist at Pepperstone.

The company's latest milestone comes just months after it hit a $4 trillion valuation in July, showing a breakneck pace of growth rarely seen in modern markets.

Analysts have said its rise reflects investors' faith that AI spending will keep soaring across industries, even as some warn of drummed-up valuations.

Nvidia's size now gives it outsized sway over global equities, with its heavy weighting in the S&P 500 and Nasdaq 100 meaning moves in its stock can ripple through pension funds, ETFs and portfolios worldwide, said analysts and investors.

However, its towering valuation also raises expectations, with each earnings report drawing intense scrutiny and even a hint of slowdown triggering sharp investor reaction.

GEOPOLITICAL BARGAINING CHIP

Nvidia's dominance has also put it squarely in the sights of global regulators. U.S. export curbs on its most advanced chips, meant to limit China’s access to cutting-edge AI hardware, have made the company a key piece of Washington's geopolitical strategy.

The firm has scrambled to design modified products for overseas markets while managing compliance risks that could weigh on future sales.

Huang's announcements, made at Nvidia's developer conference in Washington, reinforced investor confidence in the company's role at the center of the global AI boom. One of the supercomputers, built with Oracle, will house 100,000 of Nvidia's Blackwell chips.

Nvidia's Blackwell chips have also been a sticking point in U.S.-China talks, with U.S. President Donald Trump saying on Wednesday he may raise the issue of the high-end chips in his meeting with Chinese President Xi Jinping on Thursday.

Apple and Microsoft each crossed $4 trillion earlier, joining the ranks of tech giants reshaping global markets.

Apple hit the mark on Tuesday on strong iPhone 17 sales, while Microsoft regained it after valuing its OpenAI stake at $135 billion.