Nvidia reaches $5 trillion in market capitalization, investors remain cautious.

On October 29th, Nvidia made history by becoming the first company in the world to reach a market capitalization of $5 trillion, partly thanks to the global boom in artificial intelligence (AI).

People walk outside the New York Stock Exchange headquarters on Wall Street – one of the "stages" witnessing the wave of investment in AI – Photo: Reuters

While business leaders are enthusiastic about the commercial prospects of AI, significant concerns remain, not only regarding safety but also questioning the potential for overinvestment in the field.

Nvidia is shaping the AI ​​industry.

Analysts believe this milestone marks Nvidia's rapid transformation – from a niche graphics chip design company to the "backbone" of the global AI industry, turning CEO Jensen Huang into a Silicon Valley icon, and making the company's advanced chips a focal point in the US-China technology competition.

Nvidia's stock has surged 12-fold since ChatGPT launched in 2022, amid the AI ​​craze that propelled the S&P 500 to record highs. However, Nvidia reached the $5 trillion mark just three months after surpassing $4 trillion, indicating that the company's value alone has outpaced the total cryptocurrency market capitalization, according to Reuters.

"Nvidia reaching a market capitalization of $5 trillion is not just a milestone, it's a statement. Nvidia has gone from a chip manufacturer to an industry shaper," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

Nvidia's success stems from its dominant position in GPU manufacturing – the microprocessors considered the foundation for generative AI systems like ChatGPT, Gemini, and Claude. Major corporations – from Microsoft and Google to Amazon – have spent tens of billions of dollars buying Nvidia chips, making the company the "backbone supplier of the AI ​​economy ."

According to the Financial Times, eight of the ten largest stocks in the S&P 500 index are technology stocks. These eight companies account for 36% of the total value of the entire US market, 60% of the index's gains since the market bottomed out in April, and nearly 80% of the S&P 500's net gains over the past year.

According to analysts at Nomura Financial Group (Japan), the 2.4% increase in the S&P 500 over the past five sessions up to October 29th was almost entirely driven by three stocks: Alphabet, Broadcom, and Nvidia.

Drivers of US growth

In October 2025, leading researchers at the International Monetary Fund (IMF) stated that the surge in investment in AI – which has become one of the largest capital flows in modern history – has helped the United States avoid a severe economic downturn.

Observers note that the dominance of the technology sector is not a new phenomenon, as corporations like Apple, Microsoft, and Meta have led the growth of the US market since the global financial crisis more than 15 years ago. This trend isn't unique to the US; other markets around the world also tend to concentrate on a few large companies, which generate the majority of shareholder profits.

Some market observers suggest that the relentless rise of the technology sector is also driven by retail investors buying in due to fear of missing out (FOMO).

Currently, concerns about an "AI bubble" seem to persist and remain a significant factor influencing investors' investment decisions. Therefore, it is possible that the recent market growth may face hesitation and a shaken confidence among investors.

However, most investors believe it is too early to discuss the risk level of the "AI bubble," because unlike the volatile periods of the market in the past, leading technology companies today have solid balance sheets to back up their massive spending programs.

Based on several surveys, 60% of CEOs surveyed believe that the "AI craze" has not yet led to excessive investment, however, the remaining 40% expressed deep concern about the euphoric direction of the AI ​​market and believe that an upcoming correction is inevitable.

Christopher Gannatti, global research director at WisdomTree, believes that at present, technology companies are still able to demonstrate the tangible benefits of AI to reassure Wall Street about their massive spending. However, "even a small piece of bad news could be a cold shower for a volatile market," according to the financial news site Investopedia.

In a report titled "AI: In A Bubble?", analyst Eric Sheridan from investment bank Goldman Sachs argues that the current situation has some similarities to past bubbles, such as soaring valuations of AI companies and massive capital inflows, but the level of activity in the capital market remains lower than during previous bubble peaks.

Confidence drives the market.

According to some analysts, investors are pouring heavily into large technology corporations, expecting them to continue reaping huge profits from AI for many years to come. In other words, the massive market capitalization of these corporations now largely depends on the belief that these businesses can maintain their long-term dominance in the market.

Strategist Kathryn Kaminski of AlphaSimplex Investment Group commented: "There is a prospect in which these leading companies will continue to dominate for many years to come," despite the possibility that new competitors will soon emerge and gradually take over market share.

KHANH QUYNH

Source: https://tuoitre.vn/nvidia-dat-5-000-ti-usd-gioi-dau-tu-than-trong-20251102090129289.htm