Nvidia's market value surpasses $5 trillion, up over 50% this year.

Driven by the wave of artificial intelligence, Nvidia has achieved a milestone breakthrough in its market value.

On October 29 Eastern Time, Nvidia's stock price rose 3.4% at the opening, and the company's market value surpassed $5 trillion, just four months after it broke through the $4 trillion mark.

During the same day's trading session, the company's share price once surged more than 5% to $211.47 per share, while the closing price on December 31, 2024 was only $134.26 per share, marking an increase of over 50%. This accounted for almost one fifth of the S&P 500 index’s 17% gain in 2025.

Keith Lerner, Chief Investment Officer and Chief Market Strategist at Truist Advisory Services, said:

“A few years ago, a market value of $5 trillion was unimaginable. Clearly, the market has great expectations about the transformative impact of artificial intelligence.”

Frequent positive news, stock price soars

According to a previous article by Wallstreetcn, Nvidia's continued stock price surge is powered by a series of newly announced major collaborations, including chip supply agreements with Nokia, Samsung Electronics, Hyundai Motor and other favorable news, which accelerated the rise in its stock price.

Meanwhile, Nvidia CEO Jensen Huang refuted concerns about an AI bubble, boosting market sentiment. He stated that AI models are now strong enough and customers are willing to pay for them. He also said the company's latest generation of chips is expected to generate $500 billion in revenue over the next few quarters.

Additionally, at a global technology conference held in Washington, the company released a new system called NVQLink, which can connect quantum computers to its AI chips.

Most optimistic, but doubts remain

Wall Street analysts generally have an optimistic outlook on Nvidia's future prospects. Of the 80 analysts tracked by Bloomberg, over 90% give the stock a “buy” or equivalent rating, with only one analyst, Jay Goldberg from Seaport Global Securities, giving a “sell” rating. The average target price for the stock is $225.48, suggesting about 7% further upside.

From a valuation perspective, Nvidia’s forward price-to-earnings ratio is currently below 34, lower than its five-year historical average of about 39, and is approaching the Philadelphia Stock Exchange Semiconductor Index sector average of 29 times.

Despite the recent impressive rise in its stock price and the prevailing optimism on Wall Street, the market is questioning whether Nvidia can continue its meteoric ascent. Since the end of 2022, Nvidia’s stock has risen by more than 1300%.Dan Eye, Chief Investment Officer at Fort Pitt Capital Group, said that Nvidia may cede some market share to competitors such as AMD and Broadcom. He said:

“If all the expectations for artificial intelligence can be fulfilled, then the valuation might be justified; but some of these expectations may be difficult to realize.It is indeed regrettable not to hold Nvidia stock, but its price does reflect people’s high expectations.”

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