Nvidia Nears $5 Trillion Valuation as AI-Fueled Surge Continues

Nvidia Corp. is closing in on an unprecedented milestone a $5 trillion market valuation as CEO Jensen Huang’s global deal-making spree continues to supercharge the artificial intelligence boom. The company’s relentless expansion and dominance in AI hardware have made it the driving force behind one of the most remarkable market rallies in history.

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Shares climbed as much as 3.5% in premarket trading to $208.05, pushing Nvidia’s value just past the $5 trillion threshold. That achievement not only secures its position as the world’s most valuable company but also underscores its stunning rise reaching this level less than four months after surpassing $4 trillion. The only firms even within striking distance are Microsoft Corp. and Apple Inc., both hovering around $4 trillion in market capitalization.

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“A $5 trillion valuation would have sounded impossible not long ago, especially considering how fast it’s happened,” said Keith Lerner, chief investment officer and chief market strategist at Truist Advisory Services. “Investors are clearly betting big on the belief that AI will fundamentally reshape how businesses operate.”

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The latest surge in Nvidia’s stock came after former President Donald Trump said he intends to discuss the company’s flagship Blackwell AI processor with Chinese President Xi Jinping. The announcement fueled optimism that the AI leader could deepen its presence in global markets. Nvidia’s shares have already jumped 50% this year, adding about $1.6 trillion in value and contributing nearly one-fifth of the S&P 500’s 17% year-to-date gain through Tuesday.

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During its GTC conference in Washington earlier this week, Nvidia unveiled several new initiatives that reinforced its leadership in advanced computing. The company introduced a breakthrough system to connect quantum computers, expanded its partnership with Uber Technologies Inc., and announced plans to secure major AI chip contracts with South Korean giants Samsung Electronics Co. and Hyundai Motor Group.

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Nvidia’s meteoric rise captures the defining role that artificial intelligence now plays in U.S. equity markets. Since the end of 2022, the stock has skyrocketed roughly 1,275%, up from a valuation below $360 billion. Today, Nvidia makes up about 8.3% of the S&P 500’s total weighting an enormous share for a single company. Wall Street analysts remain overwhelmingly bullish on its future.

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Out of 80 analysts tracked by Bloomberg who follow Nvidia, more than 90% rate the stock as a “buy” or equivalent, with only one Seaport Global Securities’ Jay Goldberg assigning a “sell” rating. The consensus price target sits at $223.68, suggesting an additional 11% upside from current levels.

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Despite its massive run, Nvidia’s valuation doesn’t appear outlandish compared with its peers. Shares trade at less than 34 times projected earnings, below their five-year average multiple of around 39. By comparison, the Philadelphia Stock Exchange Semiconductor Index trades at about 29 times earnings.

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Still, maintaining this momentum could prove challenging. “Investors have largely learned to look past lofty AI valuations,” said Dan Eye, chief investment officer at Fort Pitt Capital Group. “If AI adoption continues at the pace many expect, Nvidia’s valuation may be justified but some of those expectations could be hard to meet.”

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Eye noted growing competitive pressures from rivals like Advanced Micro Devices Inc. and Broadcom Inc., as well as China’s push to develop its own AI processors. “Nvidia currently commands more than 90% of the AI chip market, and that share is more likely to fall than rise,” he said. “Profit margins may narrow over time, even if revenue continues to grow. It’s been hard for investors not to own Nvidia, but the stock is priced for perfection.”

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For now, Nvidia’s dominance remains unchallenged as it drives the next wave of AI innovation across industries. Whether it can sustain that momentum and live up to sky-high expectations will depend on how quickly the world’s appetite for AI continues to evolve.

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