Nvidia has become the first publicly traded company to exceed a $5 trillion market capitalisation, driven by surging demand for its graphics processing units used in artificial intelligence applications.

The American semiconductor manufacturer's shares climbed more than 5.6% on Wednesday, reaching $212.19, following reports that US President Donald Trump expects to discuss the company's Blackwell chips with Chinese President Xi Jinping during Thursday's diplomatic engagement.

Investor sentiment was further bolstered by comments from Nvidia chief executive Jensen Huang on Tuesday, who indicated the company anticipates $500 billion in AI chip sales. Huang revealed plans to construct seven new supercomputers across the United States for security, energy and scientific applications, requiring thousands of Nvidia graphics processing units.

The company also disclosed a $1 billion investment in Nokia on Tuesday, stating it would utilise some of the Finnish firm's products to "enable communication service providers to launch AI-native 5G-Advanced and 6G networks on Nvidia platforms."

The $5 trillion milestone arrives merely three months after Nvidia became the first company to cross $4 trillion in market value. Its stock has surged over 50% this year, propelled by seemingly inexhaustible demand for its GPUs, which data centres employ extensively for training large language models, inference operations and related tasks.

Nvidia's processors command premium valuations due to scarcity—a dynamic the company maintains through strategic supply management integrated with expanding data centre infrastructure requirements.

Technology stocks more broadly have rallied this year on optimism that artificial intelligence will revolutionise industries globally, comparable to the internet's transformative business impact. Over recent months, investors have responded enthusiastically to a succession of multibillion-dollar agreements—several featuring Nvidia centrally—aimed at developing data centres and infrastructure providing computational capacity for resource-intensive AI models.

In September, Nvidia announced intentions to invest up to $100 billion in OpenAI over coming years. Both companies stated they intend deploying 10 gigawatts of Nvidia systems to power OpenAI's operations.

At $5 trillion market capitalisation, Nvidia now exceeds the combined stock market valuations of all countries except the United States, China and Japan.

The valuation reflects extraordinary market confidence in AI technology's commercial prospects, though some analysts caution that such elevated valuations assume sustained revenue growth and technological leadership that may prove challenging to maintain.

Nvidia dominates the AI chip market with estimated 80-90% share for high-performance GPUs used in training advanced AI models. This near-monopoly position has enabled pricing power and profit margins that competitors struggle to match, though rivals including AMD and Intel are investing heavily in alternatives.

The company's financial performance has exceeded expectations repeatedly over recent quarters as technology giants including Microsoft, Google, Amazon and Meta expand AI infrastructure investments. These firms collectively spend billions quarterly on Nvidia hardware as they compete to develop more capable AI systems.

However, the sustainability of current demand levels remains debated. Some industry observers question whether AI applications will generate sufficient revenue to justify the massive infrastructure investments underway, whilst others argue the technology represents a fundamental shift comparable to electrification or computing itself.

Nvidia's supply constraints—whilst profitable—have frustrated some customers and prompted efforts to develop alternative chip architectures or secure long-term supply agreements. The company's ability to expand production capacity whilst maintaining technological advantages will prove crucial for sustaining current growth trajectories.

Regulatory scrutiny is also intensifying, with competition authorities in various jurisdictions examining whether Nvidia's market dominance inhibits competition. Export controls on advanced chips to China further complicate the company's growth prospects in what represents a substantial potential market.

The $5 trillion valuation places Nvidia amongst the world's most valuable companies alongside Apple, Microsoft and Saudi Aramco—remarkable for a firm that primarily manufactured gaming graphics cards until AI's recent explosion in commercial importance.