Nvidia Hits Historic $5 Trillion Valuation, Driven by Soaring Demand for AI Technology

Highlights

The shares of Nvidia increased by over 4% on Wednesday which made the tech giant the first to reach the $5 trillion mark in market value.

This remarkable milestone is the remarkable growth of this company that grown from a small video game processor into an important participant in the artificial Intelligence explosion.

The stock of Nvidia, $5 trillion valuation on Tuesday, has increased more than 50% so far this year.

The latest upward move is just a few days after Nvidia's CEO Jensen Huang said Nvidia expects $500 billion in artificial intelligence chip orders and revealed plans to construct seven new supercomputers in government agencies in the U.S. government.

In a separate development, Nvidia announced on Tuesday that it will acquire an investment of $1 billion in Nokia

The company is forming a strategic alliance with the company that operates networking to develop next-generation 6G mobile technology.

U.S. stocks, fueled by the AI boom, surged to record levels on Tuesday. All major indexes are helped by the rise in tech stocks and tech companies, with Apple and Microsoft both achieving the market value of over $4 trillion as their shares climbed.

The exhilarating rise for U.S. stocks comes despite the lingering fears of an over-inflated stock market, especially since AI-driven spending has led record-breaking sales and valuations.

The month before in the month of April, earlier in the month, International Monetary Fund and Bank of England were among the most recent financial institutions to announce that the global semiconductor industry could be in danger in the event that investor enthusiasm for AI goes down.

Ark Invest CEO Cathie Wood on Tuesday questioned the near-term possibility of an "reality check" on AI valuations. She also did not deny the possibility about the possibility of an AI bubble.

"If our expectations for AI ... are correct, we are at the very beginning of a technology revolution," Wood said to CNBC on the eve the Saudi Arabia's Future Investment Initiative (FII) in Riyadh.