Nvidia storms past $5 trillion valuation as AI boom powers meteoric rise

"In the long run, we expect tech titans to strive to find second sources or in-house solutions to diversify away from Nvidia in AI, but these efforts will, at best, only chip away at, but not supplant, Nvidia's AI dominance," said Brian Colello, senior equity analyst at Morningstar.

Shares of the Santa Clara, California-based company rose 3.5% after a string of recent announcements solidified its dominance in the AI race.

Huang unveiled $500 billion in AI chip orders on Tuesday and said he plans to build seven supercomputers for the U.S. government.

Meanwhile, President Donald Trump is expected to discuss Nvidia's Blackwell chip with Chinese President Xi Jinping on Thursday. Sales of the high-end chip have been a key sticking point between the two sides due to Washington's export controls.

STOCK SURGE BOOSTS HUANG'S WEALTH

At current prices, CEO Huang's stake in Nvidia would be worth about $177.3 billion, according to regulatory filings and Reuters calculations. He is the world's eighth-richest person, per Forbes' billionaire list.

Born in Taiwan and raised in the United States from age nine, Huang has led Nvidia since founding it in 1993. Under his leadership, the company's H100 and Blackwell processors have become the engines behind large-language models powering tools such as ChatGPT and Elon Musk's xAI.

While Nvidia remains the clear front-runner in the AI race, Big Tech peers such as Apple and Microsoft have also crossed $4 trillion in market value in recent months.

Analysts say the rally reflects investor confidence in unrelenting AI spending, though some warn valuations may be running hot.

"AI's current expansion relies on a few dominant players financing each other's capacity. The moment investors start demanding cash-flow returns instead of capacity announcements, some of these flywheels could seize," said Matthew Tuttle, CEO of Tuttle Capital Management.

Tech companies' heavy weightage in the S&P 500 and Nasdaq 100 gives them broad influence over global markets.

Nvidia is due to report quarterly results on November 19.

GEOPOLITICAL BARGAINING CHIP

The company's dominance has drawn global regulatory scrutiny, with U.S. export curbs on advanced chips making it a key pawn in Washington's strategy to limit China's access to AI technology.

"Nvidia clearly brought their story to D.C. to both educate and gain favor with the U.S. government," said Bob O'Donnell of TECHnalysis Research. "They managed to hit most of the hottest and most influential topics in tech."

The developer conference on Tuesday also served as a platform for Huang to walk a geopolitical tightrope.

He praised Trump's "America First" policies for accelerating domestic tech investment, while warning that excluding China from Nvidia's ecosystem could limit U.S. access to half of the world's AI developers.

Rivals including Advanced Micro Devices and several well-funded startups are seeking to challenge Nvidia's dominance in high-end AI chips, but it remains the industry's top choice.