Nvidia Surges Past $5 Trillion Market Cap as AI Infrastructure Demand Soars

Nvidia adds nearly $100B in market cap in a matter of days. Here is what's going right

Nvidia was once again on the move after the world's three biggest cloud companies, along with Meta Platforms , guided spending higher last week to keep pace in the artificial intelligence arms race. Some, if not much, of that spend should continue to fill the coffers of the Jensen Huang-run AI chip king. Club stock Nvidia on Monday soared another 4% to another all-time high -- around $5.12 trillion in market value. In the run-up to next week's earnings, we would expect to see more analysts raise their quarterly estimates and price targets on Nvidia. The stock closed above $5 trillion for the first time last Wednesday. Three trading days later, it added nearly $100 billion in market cap. In a Monday note to clients , Loop Capital raised its Nvidia price target to $350 per share from $250. The analysts acknowledged that the 70% upside from Friday's close built into their PT over the next four to five quarters sounds crazy. But they believe their "work suggests NVDA is about to begin a ramp of GPU that will essentially double its unit shipments in the next 12-15 months, while seeing the benefit of [average selling price] expansion and networking." Loop's note came out ahead of two major Nvidia developments before Monday's opening bell. First, Microsoft said it secured export licenses to ship Nvidia chips to the United Arab Emirates. Second, Amazon got a $38 billion commitment from OpenAI to use AWS, the largest cloud, for more compute, tapping hundreds of thousands of Nvidia graphics processing units (GPUs). Microsoft's Azure and Google Cloud at the second and third biggest, respectively. On Friday, we learned the South Korean government, along with key South Korean industrial companies including Samsung, Hyundai, and others, is working with Nvidia "to expand the nation's AI infrastructure with over a quarter-million Nvidia GPUs across its sovereign clouds and AI factories." The idea is for various South Korean entities, some government-funded, others private, to source Nvidia chips and build out various data centers with the infrastructure forming a "foundation for AI-enabled economic growth and innovation across Korea's industries, including automotive, manufacturing, and telecommunications." Remember, Nvidia made its own OpenAI deal in September, announcing a $100 billion investment into OpenAI to help the latter build out 10 gigawatts of artificial intelligence data center capacity. NVDA 5Y mountain Nvidia performance over 5 years All these updates come as it is becoming increasingly clear that access to AI infrastructure is not only important for businesses looking to compete against one another, but also fast becoming a national security issue. Governments must be proactive in securing supplies of the cutting-edge accelerated computing platforms - at this point, the latest products from Nvidia are so far beyond simply being chips - if they are to compete in a world in which data is gold and cyberattacks can cause billions of dollars worth of economic damage. Though there is no denying that the gains tied to the AI trade have already been nothing short of incredible, there is still so much more room to run. That doesn't, however, mean those gains will be made in a straight line. We must consider that while AI is real and the demand is certainly there, many companies being bid up still do not generate earnings, and in some cases may not even be generating sales yet. We wouldn't advise playing in that part of the speculative arena. While we have to consider that bubble-like froth in one part of the market can seep into other parts or that a popping of those micro bubbles in the nuclear and quantum can cause collateral damage in less speculative names, the most recent updates support the idea that investors need to maintain exposure to the highest quality AI players, and that for all the millionaires it has already minted , Nvidia's best days still lie ahead. (Jim Cramer's Charitable Trust is long NVDA, MSFT, AMZN, META. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Nvidia Termed 'Undervalued' By Masayoshi Son Last Year, Now Worth $5 Trillion: Here Is What Japanese Billionaire Investor Said About Ongoing AI Hype - Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN)

As Nvidia Corp. (NASDAQ:NVDA) races past a record-breaking $5 trillion valuation, a remark from SoftBank Group (OTC:SFTBF) (OTC:SFTBY) CEO Masayoshi Son last year that the chipmaker was "undervalued" looks remarkably prescient. Masayoshi Son's $9 Trillion AI Vision Speaking with Bloomberg at the Future Investment Initiative conference in Saudi Arabia in October 2024, Son dismissed concerns about an AI bubble, arguing that Nvidia's market potential was still vastly underestimated. Son said he thinks "Nvidia is undervalued" because the "future is much bigger" and that the chipmaker is just one example of it. He went on to frame an expansive vision for the artificial intelligence economy, estimating that the rise of artificial superintelligence could require 400 gigawatts of data center power and as many as 200 million AI chips, representing a cumulative capital expenditure of $9 trillion. "It's too much investment for many people's view. I say it's still very reasonable. CapEx, $9 trillion is not too big, maybe too small," Son stated at the time. See Also: Palantir Could Be Nvidia's Fastest Route To $500 Billion In AI Software -- Cathie Wood Saw It Coming AI Investment, Not A Bubble Son also addressed critics who warned of excessive hype surrounding generative AI and semiconductor stocks, but countered that even modest real-world productivity gains would justify massive AI investments. He also projected that four major companies -- the "new GAFA," a reference to Alphabet Inc.'s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google, Apple Inc. (NASDAQ:AAPL), Meta Platforms, Inc.'s (NASDAQ:MET) Facebook and Amazon.com, Inc. (NASDAQ:AMZN) -- could together earn $4 trillion in annual profit from the AI revolution. When asked if SoftBank aimed to be one of them, he replied immediately, saying, "Of course." Jensen Huang-Led Nvidia's Meteoric Rise Fast forward to today, Nvidia -- led by CEO Jensen Huang -- has crossed the $5 trillion market capitalization mark, cementing its position as the most valuable semiconductor company in history. The rally has been fueled by record demand for AI accelerators and data center chips powering large-scale models across tech giants like Microsoft Corporation (NASDAQ:MSFT), Meta and Google. Analysts such as Dan Ives of Wedbush call this "the fuel for the AI revolution," while others, like Kevin Gordon at Schwab, caution that Nvidia's valuation now represents 16.5% of U.S. nominal GDP -- far surpassing the dot-com era highs of Cisco. Nvidia shares have climbed 49.58% year to date. According to Benzinga's Edge Stock Rankings, the stock shows strong Momentum, Growth and Quality, maintaining a positive price trend across short-, medium-, and long-term periods. Click here for a detailed look at how it stacks up against peers and competitors. Read Next: After Google's $2.7B Acquisition Of Founders And Staff, This AI Startup Abandons Large Language Model Plans And Shifts Focus Away From Chatbots Photo courtesy: glen photo / Shutterstock.com Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors. AAPLApple Inc$268.20-0.80%OverviewAMZNAmazon.com Inc$252.183.26%GOOGAlphabet Inc$282.170.12%GOOGLAlphabet Inc$281.820.22%METMetLife Inc$79.15-0.84%MSFTMicrosoft Corp$516.11-0.33%NVDANVIDIA Corp$206.602.03%SFTBFSoftBank Group Corp$176.852.72%SFTBYSoftBank Group CorpNot Available-%Market News and Data brought to you by Benzinga APIs