This week, we’ve seen Nvidia’s market capitalisation reach unprecedented heights, even surpassing 5 trillion dollars. It’s incredible to think that it was only a few months ago that we were talking about 4 trillion dollars. But is all of this truly solid, or are we heading for a crash? Questions are being raised, especially when we look at how all this money is circulating between companies in the sector. We’re going to try and untangle all of this.
Key Points
- Nvidia is the first company in the world to exceed 5 trillion dollars in market capitalisation, a record reached very quickly after crossing the 4 trillion dollar mark.
- This performance is largely due to the demand for its artificial intelligence chips, where Nvidia holds an overwhelming market share.
- Economists are concerned about possible circular financing, where Nvidia and its partners mutually purchase services and chips from each other, creating a potential bubble.
- Nvidia CEO Jensen Huang refutes the idea of a bubble and is confident in the future growth of the AI market.
- Despite the performance, uncertainties remain regarding market volatility, the reliability of economic indicators, and the long-term viability of the AI business model.
Nvidia’s Market Capitalisation Reaches a New Historic High
Nvidia, the First Company to Exceed 5 Trillion Dollars
This is a historic moment for the world of technology and finance. Nvidia has just crossed a never-before-seen threshold, becoming the first company in the world to surpass 5 trillion dollars in market capitalisation. This colossal figure testifies to the central role the semiconductor giant now plays in the current economy, particularly in the field of artificial intelligence. The stock price has experienced a meteoric rise, exceeding 211 dollars at the start of trading to reach this new record. This is not the first time Nvidia has pushed boundaries; the company was already the first to cross 4 trillion dollars, then 3 trillion dollars, and so on, demonstrating exponential growth over a relatively short period. This exceptional performance places Nvidia far ahead of its competitors and even ahead of giants like Apple and Microsoft, which recently reached 4 trillion dollars. Nvidia’s value now exceeds the Gross Domestic Product of many countries, raising questions about market concentration and the overall health of the digital economy.
A Meteoric Rise After Previously Reaching 4 Trillion Dollars
Just three months ago, the financial world held its breath when Nvidia crossed the 4 trillion dollar mark. Today, the company has not only repeated this feat but has surpassed it spectacularly. This new milestone, reached at the end of September 2025, confirms Nvidia’s impressive momentum. The company has successfully capitalised on the enthusiasm for artificial intelligence, transforming a technological trend into an unprecedented stock market performance. The speed with which Nvidia has added a trillion dollars to its valuation is astonishing, going from 4 trillion to 5 trillion dollars in record time. This rapid growth has fuelled discussions about a possible speculative bubble, but for now, the numbers continue to defy predictions.
AI Chip Orders, the Main Driver of This Valuation
What explains such a surge? The answer lies largely in the insatiable demand for Nvidia’s artificial intelligence chips. CEO Jensen Huang recently announced that the order backlog for these chips amounts to over 500 billion dollars until 2026. It is this constant flow of orders, from the world’s largest technology companies building AI infrastructure, that supports Nvidia’s valuation. These chips have become the essential component for the development and deployment of AI models, placing Nvidia at the heart of this technological revolution. The company holds an overwhelming market share in this sector, giving it pricing power and record profitability. Investors are betting on the continuation of this trend, believing that AI is only just beginning and that demand for Nvidia’s chips will continue to grow. The global AI market has never seemed so prosperous, and Nvidia is the primary beneficiary, consolidating its position as the undisputed leader.
Nvidia’s performance is undeniably impressive, but it also raises questions about market concentration and the sustainability of this growth. Investors are closely scrutinising the company’s upcoming results and announcements to assess whether this upward trend can be maintained in the long term, or if the warning signs of a correction are already present.
Here are some key figures illustrating this performance:
- Market Capitalisation: Over 5 trillion dollars.
- Recent Growth: Added 1 trillion dollars in just three months.
- AI Order Backlog: Estimated at over 500 billion dollars until 2026.
- AI Market Share: Over 90% for AI chips.
This dominance in the AI chip market is a key factor in Nvidia’s current valuation.
The Foundations of Nvidia’s Growth Under Scrutiny
Overwhelming Dominance in the AI Chip Market
It must be acknowledged that Nvidia has carved out a prime position in the sector of chips dedicated to artificial intelligence. We’re talking about over 90% market share, which is simply enormous. This dominant position is not a matter of chance; it is based on years of development and a clear vision for the future of AI. AI chip orders are piling up, even exceeding the most optimistic forecasts, with contracts amounting to hundreds of billions of dollars until 2026. This is a strong sign of the confidence that major technology players place in Nvidia’s products. This dominance is also reflected in the figures, with quarterly revenues reaching record highs, such as the 68.1 billion dollars recorded, a 73% increase compared to the previous year. These impressive figures clearly show the current momentum.
Record Profits Fueled by Growing Demand
Demand for Nvidia’s chips is exploding, and this is directly translating into record profits. Companies developing AI need this computing power, and Nvidia is, for now, the primary supplier. Data centres are multiplying, and each one is an avid consumer of semiconductors. This situation has allowed Nvidia to transition from a manufacturer of graphics cards for video games to an indispensable player in AI. The profits generated are reinvested, creating a virtuous cycle that further strengthens the company’s position. We can see that investments in AI infrastructure continue to grow, and Nvidia is at the heart of this expansion.
The Transition from a Video Game Manufacturer to an Indispensable AI Player
Just a few years ago, Nvidia was primarily known for its graphics cards for gamers. But the company anticipated the shift towards artificial intelligence. This strategic transition has been remarkably well executed. The chips designed for video games already possessed the necessary characteristics for parallel processing, a key skill for AI. By focusing on this rapidly expanding market, Nvidia has successfully positioned itself as a leader.
The move from a niche market to the AI market has been a major transformation, allowing Nvidia to capture a significant share of current technological growth.
This evolution has enabled Nvidia to surpass historic market capitalisation thresholds, reaching peaks like 5 trillion dollars. The SOX semiconductor index is also following this upward trend. The question now is whether this growth is sustainable or if it masks fragilities.
The Specter of a Speculative Bubble Looms Over AI
We are hearing more and more about bubbles, and not just in casual conversations. Economists, central bankers, even heads of major banks are sounding the alarm. Current valuations, especially in the private sector, are reaching heights reminiscent of other eras. We’re talking about a self-feeding business model, a circle where the same funds go round and round between a few companies.
Economists’ Warnings About Circular Financing
What is concerning is what is known as « circular financing. » Imagine this: a company like Nvidia sells its chips to another, which uses them to provide services to a third, which in turn invests in the first. This is somewhat the case with players like CoreWeave, which raised billions using Nvidia chips as collateral, then rents this capacity to OpenAI and Microsoft. OpenAI, for its part, invests in startups that depend on its own AI models, while selling them its services. It creates momentum, certainly, but it relies on constant growth. If demand for these chips slows down, or if investors decide to withdraw their money, this entire structure could falter. It’s a bit like building a house on sand.
A Network of Agreements Raising Questions
These complex financial links between companies in the AI sector, while creating a kind of synergy, raise questions. When Nvidia invests in OpenAI, which buys computing power from Oracle, which in turn buys chips from Nvidia, we can see that the system is interconnected. Investors then buy all of this, hoping for returns. But if we look closer, the real, tangible benefits of AI, beyond this financial mechanism, are not always obvious. It feels like the ecosystem is self-sustaining, but without necessarily creating new, lasting value. It’s a bit like a snake eating its own tail, and it can be risky.
Comparison with the Dot-Com Bubble of the 2000s
Current figures are dizzying. Nvidia’s capitalisation exceeds the GDP of most countries in the world. Price-to-earnings ratios are reaching levels comparable to those seen during the dot-com bubble of the late 1990s. Back then, there was also immense enthusiasm for a new technology, with valuations that seemed disconnected from economic reality. We are also seeing the return of certain speculative financial instruments, such as SPACs or « meme » stocks, which are reminiscent of that period. History has shown us that these periods of euphoria can end abruptly. It is therefore legitimate to wonder if we are not reliving a similar situation, where excessive optimism masks significant risks. We might well be experiencing a new stock market illusion.
Artificial intelligence, despite its potential, remains a technology whose profitability on a large scale is still largely unproven. The current business model, based on cross-investments and exponential demand, could prove fragile in the face of a slowdown or a shift in investor sentiment.
The Circular Financing Model Decrypted
Nvidia Invests in its Partners Who Buy its Chips
We are increasingly hearing about what is called « circular financing » in the AI sector, and it directly concerns Nvidia. Essentially, it’s a bit like companies lending money to each other to buy each other’s products. For example, Nvidia might invest in a startup or another tech company. Then, this company, needing computing power for its own AI projects, will buy chips… guess from whom? Yes, from Nvidia. It’s a bit of a circle where the money always returns to the starting point, creating a kind of artificial self-sufficiency.
OpenAI, AMD, Oracle: An Ecosystem of Cross-Investments
This pattern is clearly visible with major players like OpenAI. We have seen announcements of massive deals, sometimes for hundreds of billions of dollars, involving OpenAI, Nvidia, AMD, and Oracle. These deals are presented as necessary to build the next generation of AI models. But when we look closer, we see that the same companies investing in OpenAI are also the ones selling it the chips and infrastructure it needs. It’s a complex network where investments and sales are intertwined. For instance, CoreWeave raised funds using its Nvidia chips as collateral, then leased this capacity to clients like OpenAI and Microsoft. It’s a way of circulating money within a small group of players.
Mutual Dependence as a Warning Sign of a Bubble
This circular financing system, where the same funds circulate among a few companies, can create the illusion of endless growth. But many economists are concerned. They see it as a classic sign that can precede a speculative bubble, much like what we saw during the dot-com bubble of the 2000s. If demand for chips were to slow down, or if investors suddenly decided to withdraw their money, this house of cards could collapse. It’s a bit like everyone counting on their neighbour to keep buying, without necessarily having real demand from end-users. This model relies on constant growth, and that’s where the problem lies.
This type of arrangement, where companies financially feed each other, can mask an economic reality that is less solid than it appears. Mutual dependence creates momentum, but it can also become a fragility if external conditions change.
This business model, while innovative, raises questions about its long-term viability. It is important to understand how these circular economic models work to assess the risks. The idea is to finance circularity to stimulate these advancements, but we must ensure that it does not create an artificial bubble. Partnerships in the AI sector are increasingly scrutinised from this perspective, and it is essential to closely follow the evolution of these financing for circularity.
Nvidia’s CEO Reacts to Concerns
Faced with mounting questions about a possible speculative bubble in the artificial intelligence sector, Nvidia CEO Jensen Huang has sought to reassure. He asserts that the current situation is very different from what has been experienced in the past, particularly during the dot-com bubble. According to him, the foundations of AI growth are solid and sustainable.
Jensen Huang Denies the Existence of a Speculative Bubble
During the presentation of the latest financial results, Jensen Huang clearly expressed his disagreement with the idea of an AI bubble. He emphasised that discussions on this subject did not reflect the reality of the market, which he considers fundamentally different. « From our perspective, we are seeing something very different, » he stated, referring to sustained demand and massive investments in AI infrastructure. He highlights the continuous growth in chip orders, which are exceeding even the most optimistic forecasts, as proof of the sector’s vitality. These orders amount to over 500 billion dollars until 2026, a figure that demonstrates strong confidence from market players in AI’s potential.
Confidence in the Solidity of the AI Market
Huang relies on several elements to support his confidence. Firstly, the constant demand from digital giants to build their data centres, which require a phenomenal amount of semiconductors. Nvidia, as the undisputed leader, directly benefits from this trend. Secondly, he mentions Nvidia’s transition from a manufacturer of graphics cards for video games to an essential supplier for AI. This strategic diversification strengthens its position. Finally, he points to the continuous investments by « hyperscalers » who are revising their investment plans upwards, confirming the need for robust AI infrastructure.
Optimistic Forecasts for Chip Sales
Nvidia’s AI chip sales outlook remains very positive. The company anticipates solid performance for the coming quarters, supported by growing demand and, potentially, by the lifting of certain trade restrictions. Last quarter’s figures already exceeded expectations, with revenue of 57 billion dollars. Forecasts for the following quarter are also well above analyst consensus. This positive momentum, despite concerns about valuation, suggests that the AI market is far from reaching maturity.
Nvidia’s commercial performance, while impressive, is not enough to allay all fears. The hypothesis of a speculative bubble surrounding artificial intelligence remains, raising questions about the long-term profitability of the massive investments made in this technology.
Persistent Uncertainties Despite Performance
Despite the impressive figures Nvidia is posting, there is doubt about the solidity of this rise. Quarterly results, even if they exceed expectations, are not always enough to reassure markets. We can see that the Nasdaq Composite, after a brief recovery, eventually fell, and Nvidia’s stock itself saw its initial gains evaporate.
Market Volatility and Fund Profit-Taking
The stock market has become quite nervous. Investors seem to be questioning the fair value of technology companies, especially when they can no longer rely on interest rate cuts from the Federal Reserve to support prices. As a result, many investment funds have decided to sell some of their shares to secure their gains. This creates some instability, and we have seen the Nasdaq lose a considerable number of points since its last record.
Lack of Reliable US Economic Indicators
Another point of concern is the lack of clear data on the US economy. Without this information, it is difficult for analysts and investors to get a precise idea of the country’s direction. This general economic uncertainty adds a layer of caution, even when a company like Nvidia publishes good results. We wonder if the current growth is truly sustainable.
Long-Term Viability of the AI Business Model
Beyond immediate performance, the question of the long-term profitability of massive investments in AI remains open. Some economists, like the CEO of Goldman Sachs, are questioning the ability of this model to generate consistent returns in the coming years. There is a risk that much of the capital invested will not produce the expected gains, which could cool down the market. The comparison with the dot-com bubble of the 2000s is never far away.
The question is not so much whether AI will revolutionise sectors, but rather whether current investments, often concentrated in an ecosystem of companies that finance each other, are sustainable over time without concrete benefits for the real economy or end consumers.
It should also be noted that Nvidia’s price-to-earnings ratio has fluctuated, which can be a sign of this ambient nervousness. Although the company remains an undisputed leader, the market reacts to the slightest alert, and the performance of Nvidia’s stock on April 13, 2026 is an example. Therefore, caution remains advised, despite apparent successes.
AI: A Technological Revolution or a Stock Market Illusion?
Artificial intelligence is on everyone’s lips, and the numbers speak for themselves. Nvidia, for example, recently crossed the symbolic threshold of 5 trillion dollars in market capitalisation. This is a figure that exceeds the Gross Domestic Product of most countries in the world, with the notable exceptions of the United States and China. We are talking about an enthusiasm that has propelled price-to-earnings ratios to levels comparable to those observed during the dot-com bubble of the 2000s. A true « mad season » seems to have begun in the markets.
Nvidia’s Value Exceeds the GDP of Many Countries
It is striking to note that Nvidia’s current valuation surpasses the GDP of almost all nations. This situation raises questions about the solidity of the foundations of this growth. Is it a sign of a profound technological revolution redefining the global economy, or rather unbridled speculation? History has shown us that such peaks can be followed by sharp declines, as evidenced by the current turbulence in the AI sector, where nearly 1.5 trillion dollars in capitalisation has already been erased due to concerns about job losses and unproductive investments. The market is experiencing turbulence.
Price-to-Earnings Ratios Comparable to the Dot-Com Bubble
Current financial indicators, particularly price-to-earnings ratios, are dangerously reminiscent of those at the end of the 1990s. At that time, optimism surrounding the internet led to astronomical valuations, often disconnected from economic realities. Today, AI appears to be following a similar trajectory. This excessive enthusiasm, while potentially justified by AI’s potential, creates fertile ground for speculation. The adoption of AI is extending beyond technology, suggesting a broader industrial revolution, but the pace of this adoption and its actual profitability remain to be proven.
The Return of Speculative Investments: SPACs, ‘Meme’ Stocks, Leveraged Products
Alongside this AI fever, we are observing a renewed interest in highly speculative financial instruments. SPACs (Special Purpose Acquisition Companies) have seen their fundraising explode, reaching records since 2021. « Meme » stocks, once considered a curiosity, are resurfacing, attracting speculators once again. Similarly, leveraged products, whether cryptocurrency futures or ETFs offering amplified exposure, are experiencing a resurgence in popularity. This proliferation of high-risk investment vehicles, often disconnected from economic fundamentals, can be interpreted as a warning sign of a bubble, where the pursuit of quick gains takes precedence over rational analysis. AI, like the internet before it, could well be the catalyst for a new economic era, but caution remains advised in the face of the current scale of speculation. AI could benefit well-managed companies.
So, Bubble or Not a Bubble?
Nvidia has reached an impressive peak, becoming the first company to surpass 5 trillion dollars in market capitalisation. This is an achievement that clearly demonstrates the power of artificial intelligence today. But, as we have seen, this rapid rise raises questions. This system where companies invest in each other is a bit like a house of cards: it can hold, but it can also collapse if a single card moves. For now, the market seems confident, but we must remain vigilant. AI has enormous potential, that’s certain, but it will take time to see if all these investments translate into concrete and sustainable profits for everyone, not just for a few players in the sector. The future will tell us whether this period is the beginning of a new technological era or just a bubble that will eventually burst.
Frequently Asked Questions
Why is Nvidia worth so much money?
Nvidia makes the chips (like brains for computers) that are super important for artificial intelligence (AI). Since everyone wants AI now, everyone wants Nvidia’s chips. This makes the company’s value go up very high.
Is Nvidia’s value like a bubble that will burst?
Some people think so. They say that companies are buying and selling things to each other, including Nvidia’s chips, which artificially drives up prices. It’s a bit like when everyone starts buying a toy because it’s trendy, and the price skyrockets, before coming back down.
What is the ‘circular financing’ we’re talking about?
It’s when a company, like Nvidia, lends money or invests in another company. Then, that other company uses that money to buy Nvidia’s products (its chips, for example). This makes money circulate in a closed loop, which can give the impression that everything is fine, even if that’s not necessarily the case in the long term.
Does Nvidia’s CEO think there’s a bubble?
No, Nvidia’s CEO, Jensen Huang, believes the AI market is solid and not a bubble. He is very confident that people will continue to buy their chips because AI is here to stay and will become even more important.
Is AI a real revolution or just a trend for stock market investors?
That’s a big question! AI is clearly a revolutionary technology that is changing many things. But the way companies exchange money and the speed at which Nvidia’s value has increased make some wonder if it’s also a kind of « trend » for making money on the stock market, like the dot-com bubble a long time ago.
Why is Nvidia’s value compared to the GDP of some countries?
Because Nvidia’s total value (what it’s worth on the stock market) has become so huge that it’s larger than the wealth produced by many countries in a year (their GDP). This shows how gigantic this company has become very quickly.
