Nvidia Becomes First $5 Trillion Company as AI Demand Surges

[MacRumors]

Nvidia today became the first public company to reach a $5 trillion market capitalization, hitting the milestone 3.5 months after surpassing $4 trillion.

Over the past week, Nvidia's shares have climbed 14.5 percent due to demand for its GPUs and the possibility that it might be able to sell its most advanced chips in China. As of now, the U.S. prevents Nvidia from selling its Blackwell AI chips to China, and China has also restricted Chinese companies from importing some Nvidia chips because of national security concerns. Trump said that he would discuss Nvidia's "super duper chip" with Chinese president Xi Jinping on October 30, leading to hopes that the situation might change.

Nvidia's AI chips are key for developing and training large language AI models, and almost every major tech company is working on some kind of AI product. Apple, for example, is building out AI infrastructure to power Apple Intelligence and other future AI capabilities. Apple is using Apple Silicon chips, but it has also reportedly invested in Nvidia server technology.

Nvidia's growth has outpaced Apple, Microsoft, and other tech companies, but Apple reached a milestone of its own yesterday. Just ahead of Thursday's earnings call, Apple briefly reached a $4 trillion valuation. Apple's stock price has dropped slightly since then, but the company is close to hitting that target again.

Apple is pumping out its own artificial intelligence servers, and the first units started shipping out this month. It is unlikely that Apple will compete with Nvidia in the server market because its servers are designed for internal use.

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Article Link: Nvidia Becomes First $5 Trillion Company as AI Demand Surges

 

[jz0309]

And when, not if, when the AI bubble bursts, it will get cut in half within a few days. They are way way way overvalued...

 

[Kissmo1980]

Aaaah back to 2008 when the AI bubble
Pops….. 😔

 

[topgunn]

A trillion here, a trillion there, and pretty soon you're talking real money.

 

[boswald]

I have a feeling they'll spin off their consumer GPU business and focus on AI directly. I hope I'm wrong, but stranger things have happened.

 

[rp2011]

And everybody knows Nvidia will be the one hit hardest when the AI bubble pops. I would be selling Nvidia right about now.

 

[JPack]

The ultimate comeback kid.

Look back 10-15 years ago and some people predicted Intel integrated graphics and Apple SoCs would eat Nvidia's lunch.

 

[Andres Cantu]

All these trillion dollar companies became sorts of banks for holding people’s wealth.

What happens once people need money and need to cash out?

 

[370zulu]

It is amazing how some people can be so obtuse when it comes to the approaching AI cliff.

 

[DHagan4755]

And when, not if, when the AI bubble bursts, it will get cut in half within a few days. They are way way way overvalued...

I tend to agree. Looking at their monthly chart, it's got that kind of parabolic look with the "blow off top" coming.

 

[BruiserBear]

And everybody knows Nvidia will be the one hit hardest when the AI bubble pops. I would be selling Nvidia right about now.

There were people saying this a year or two ago, when the stock was worth half of what it’s worth now.

Time and time again people’s ability to predict what will happen next in the stock market is proven to be incorrect.

 

[vegetassj4]

In the words of a legendary (tv personality) investor

 

[WarmWinterHat]

I've kept my investments completely away from AI (and crypto). Not going to be holding the TP when this turd flushes.

 

[ProbablyDylan]

Wonder what'll be left of Nvidia if (or when) the bubble bursts. Apple, Google, Microsoft, Meta all have other businesses to pull money from but Nvidia has gone all-in on AI.

 

[slippery-pete]

There were people saying this a year or two ago, when the stock was worth half of what it’s worth now.

Time and time again people’s ability to predict what will happen next in the stock market is proven to be incorrect.

This.

Also, the predicted AI "Bubble Burst" is an interesting take. We are just in the infancy stages with AI. In 5-10 years from now it will basically be involved with almost everything we do.

 

[victorvictoria]

Nobody better say anything bad about Nvidia to me. I bought 100 shares on Sept 2, 2022. They cost me $13,908.88. At present, due to a 10:1 stock split and reinvested dividends, I own 1,001.477 shares, whose value is $206,779.96.

That's a 1,386.67% increase in 3 years and two months. And no end in sight.

 

[CEmajr]

All these trillion dollar companies became sorts of banks for holding people’s wealth.

What happens once people need money and need to cash out?

You sell your shares.

 

[BruiserBear]

I've kept my investments completely away from AI (and crypto). Not going to be holding the TP when this turd flushes.

Holding an S&P 500 index fund is proven over decades to be the right way to go. By choosing to stay away from AI companies you have chosen to skip out of massive gains in the stock market for years now. Will the market come tumbling back down? Maybe, but lots of people think they know this stuff and they turn out wrong, so an index fund removes your ability to think you’re going to outsmart the system. The index fund always wins in the end. You’ve likely lost a lot of money thinking you know better how to pick stocks.

 

[pksv]

And when, not if, when the AI bubble bursts, it will get cut in half within a few days. They are way way way overvalued...

People have been talking about bursting this bubble for more than two years now, and it just not bursting. Eventually, there will be that "burst," a 20-40% drop to levels that are probably still far ahead. Those people will say, "See, I told you so?" LOL.

 

[everlast3434]

Ai demand surges… just so you know so that’s me making Genmojis all day!!!

 

[displayblock]

Hank Green had a good video recently that explains how NVIDIA pays a whole bunch of companies to buy their chips, inflating demand.

 

[BruiserBear]

All these trillion dollar companies became sorts of banks for holding people’s wealth.

What happens once people need money and need to cash out?

You’ve got a lot of to learn about the stock market and investing.

 

[sw1tcher]

And when, not if, when the AI bubble bursts, it will get cut in half within a few days. They are way way way overvalued...

Based on what? Let's look at their forward P/E ratio. For fiscal 2026 they're expected to earn $4.53 and for fiscal 2027 it's $6.53.

At $207, it means their forward P/E for 2026 is 45.7 and 2027 P/E is 31.7. I wouldn't call that "way way way overvalued"

If that's overvalued, then Apple (2026 P/E = 32.3 ; 2027 P/E = 30.37) is even more overvalued given Nvidia's earnings and revenue rate of growth

- Nvidia 5 year revenue growth rate = 64.24%
- Nvidia 5 year EPS growth rate = 91.83%

is much higher than Apple's.

- Apple 5 year revenue growth rate = 8.49%
- Apple 5 year EPS growth rate = 17.83%


And Nvidia hasn't been manipulating EPS # by buying back massive amount of stock each year.

 

[JoeSilver]

I have a feeling they'll spin off their consumer GPU business and focus on AI directly. I hope I'm wrong, but stranger things have happened.

They already have. Since the GPU demand is overwhelmingly driven by the AI race craze, rather than, say, the computer games industry, like it was until a few years ago, by designing the new GPUS they are already focussing on machine learning.
Plus, their direct investment in OpenAI makes them even more tied up with the AI craze, in a dangerous way, because they are investing in the same companies from which they receive most of the revenues. Which, one on hand, looks like a perfect multiplier: "we invest in OpenAI so that we partake of their expected returns and the bigger OpenAI becomes, the more GPUs we sell to them"), on the other it means complete reliance on a possible bubble.
However, until the GPUs are essential to the AI effort, it makes no sense to lose their monopoly.

 

[pksv]

And everybody knows Nvidia will be the one hit hardest when the AI bubble pops. I would be selling Nvidia right about now.

Yes, yes, bursting any moment! 😂

I've kept my investments completely away from AI (and crypto). Not going to be holding the TP when this turd flushes.

The best investments were in WeWork and GoPro, right?