Nvidia breaks records: its stock market value exceeds that of the Netherlands, Spain and Italy combined

The American stock market has its giants, but one name now stands head and shoulders above them all: Nvidia. The chip giant’s stock market value recently rose to more than $5.1 trillion. This creates a striking concentration of power that has never been seen before.

Nvidia drives up entire index

According to the analysts of The Kobeissi Letter, Nvidia’s performance is “unprecedented” and leads to striking figures.

The company now represents 8.5 percent of the total value of the S&P 500 index. That’s the highest percentage ever achieved by a single company in the index’s history.

The analyst adds another striking fact: Nvidia is now larger than six of the eleven sectors within the S&P 500. The materials, real estate and utilities sectors alone together are worth less than this one tech giant.

Kobeissi also notes that Nvidia’s stock market value is now worth more than the entire stock markets of countries such as Italy, Spain, the United Arab Emirates and the Netherlands combined. Globally, only the United States, China, Germany, Japan and India are bigger.

Despite a recent share decline, Nvidia remains one of the most valuable technology stocks in the world with a market value of $4.85 trillion. Numbers two and three, Apple and Microsoft, follow at a considerable distance with valuations of $3.91 and $3.76 trillion respectively.

Winner of the AI ​​revolution

Nvidia is rising so fast because the company produces the most powerful chips in the world, which are essential for the rise of artificial intelligence (AI). The explosive growth of AI applications, from chatbots to data centers and self-driving cars, is driving demand for Nvidia’s graphics processors to record levels.

Since the AI ​​hype took off in 2023, the stock has risen by almost 1,700 percent. At the end of October, Nvidia hit an all-time high of $212. The price has now dropped slightly and is just below $200.

The downside of the AI ​​hype?

The rapid rise of Nvidia shows how powerful the AI ​​hype is driving the financial markets. Global demand for powerful artificial intelligence chips is pushing the stock to unprecedented heights. At the same time, this concentration of value raises questions among experts.

For example, OpenAI, the company behind the popular chatbot ChatGPT, is currently valued at $500 billion, good for the title of the largest startup in the world. According to sources, an IPO is planned with a possible valuation of $1 trillion, which would make it the largest IPO ever.

Economist Gita Gopinath warns that the current AI hype is creating a huge bubble in the financial markets. She predicts that a crash similar to the 2000 dot-com bubble could lead to $35 trillion in losses worldwide. In particular, the sky-high valuations of AI companies, with no prospect of profitability, make the market extremely vulnerable.