Nvidia has become the first Nasdaq-listed company to reach a market capitalization of $5 trillion. This milestone was achieved on Tuesday, with Nvidia's stock price jumping nearly 5% to a record high of $201.03.
Several factors have contributed to Nvidia's soaring stock price. A key driver is the company's dominance in the artificial intelligence (AI) sector. Nvidia's CEO, Jensen Huang, announced that the company has $500 billion in orders for its AI processors. Furthermore, Nvidia is planning to construct seven new supercomputers for the U.S. Department of Energy. These supercomputers will partly support the maintenance and advancement of the nation's nuclear weapons program. One of the most powerful systems, developed in collaboration with Oracle, will feature 100,000 of Nvidia's top-tier Blackwell AI chips.
The company's strategic partnerships and investments have also fueled its growth. Nvidia announced a $1 billion investment in Nokia to support AI initiatives. This investment is part of a strategic partnership to co-develop next-generation 6G technology, focusing on AI-driven networking solutions. Nvidia is also collaborating with Deutsche Telekom to develop a 1.2 billion Euro AI data center in Germany. Additionally, Foxconn plans to spend $1.37 billion on an AI compute cluster and a supercomputing center in Taiwan, expected to be completed in late 2026.
Jensen Huang's recent keynote address at a developer conference further boosted investor confidence. He highlighted the company's progress in AI, including the unveiling of an AI-native 6G wireless stack built in the U.S. with Nokia. Huang also introduced NVQLink to connect quantum processors with GPUs and announced major partnerships to build seven new AI supercomputers. He emphasized the role of AI factories as the next generation of data centers, powered by new chips like BlueField-4 and designed using Omniverse DSX.
Nvidia's financial performance and future prospects have impressed analysts. One analyst suggested that Nvidia's guidance could indicate a $140 billion upside to datacenter GPU revenue over the next two years. This could translate to a ~$3 EPS upside to the current CY26 estimate.
The broader market context has also played a role in Nvidia's rise. Positive earnings reports from companies like UnitedHealth Group, United Parcel Service, and PayPal have contributed to a favorable market sentiment. Moreover, the anticipation of interest rate cuts by the Federal Reserve has further buoyed investor confidence in tech stocks.
Nvidia's stock has surged 50% in 2025, and its market capitalization first exceeded $4 trillion in July. As Nvidia's valuation approaches $5 trillion, some analysts have raised concerns about an AI bubble. However, the company's strong fundamentals, strategic partnerships, and continuous innovation in AI technology suggest that its growth trajectory may continue.
While Nvidia is the first Nasdaq-listed company to reach this milestone, Microsoft is the second most valuable company with a market capitalization of $4.03 trillion. Apple also briefly crossed the $4 trillion mark.
