Nvidia on track to hit historic $5 trillion valuation amid AI rally

shares Nvidia It rose more than 3% in premarket Wednesday, putting the tech giant on track to become the first company to surpass the $5 trillion market cap threshold.

This remarkable milestone will reflect a remarkable rise for the company as it transforms from a niche video game processor to an integrated player in the artificial intelligence boom.

Nvidia’s shares were last up 3.1% in premarketing. The stock price, which closed by 5% in the previous session, has increased by approximately 50% since the beginning of the year.

The latest surge came shortly after CEO Jensen Huang said Nvidia was expecting $500 billion in AI chip orders. announced It plans to produce seven new supercomputers for the US government.

Separately, Nvidia announced Tuesday it will buy $1 billion worth of shares. Nokia’sis forming a strategic partnership with the networking company to develop next-generation 6G cellular technology.

U.S. stocks soared to record highs on Tuesday, boosted by AI trading. Major averages rose on gains in technology. Apple And Microsoft Both reached a market capitalization of over $4 trillion after their stocks soared.

The dizzying rise in U.S. stocks comes despite ongoing concerns about a bubble, especially as AI-fueled spending leads to record deals and valuations.

At the beginning of the month, the International Monetary Fund and the Bank of England became the latest financial institutions to warn that global stock markets could suffer if investors’ appetite for AI wanes.

Ark Invest CEO Cathie Wood on Tuesday flagged the possibility of a near-term “reality check” on AI valuations but backed off amid fears of an AI bubble.

“If our expectations for artificial intelligence are correct, we are at the very beginning of a technology revolution,” Wood told CNBC on the sidelines of Saudi Arabia’s Future Investment Initiative (FII) in Riyadh.