Nvidia’s ascent to a $5 trillion market capitalization marks one of the most extraordinary moments in modern financial history. The company’s dominance in artificial intelligence hardware and its gravitational pull on global markets have redrawn the lines of corporate power. But with one company now carrying more weight in the S&P 500 than the bottom 240 combined, investors are asking: is this the dawn of a new industrial era — or the early tremors of overexuberance?

A Historic Milestone for Markets

From a chipmaker once viewed as a niche supplier for gaming GPUs, Nvidia has become the cornerstone of the AI revolution. Its market cap now exceeds the combined value of entire national exchanges — including those of Italy, Spain, the Netherlands, and the UAE. Only five stock markets globally are worth more: the U.S., China, Japan, Hong Kong, and India.

The transformation has been breathtaking. Nvidia’s projected revenue for its next fiscal year sits at $285 billion — up from just $11 billion in 2020. Fueled by corporate AI investments from Microsoft, Meta, Amazon, and others, global capital spending on data infrastructure is expected to climb 34% to $440 billion over the next year. Each dollar of that outlay reinforces Nvidia’s stranglehold on the most critical component of the AI supply chain: advanced GPUs that power everything from cloud computing to autonomous vehicles.

“This is a massive outlier from a historical perspective — really something to behold for the ages,” said Matt Miskin, co-chief investment strategist at Manulife John Hancock Investments.

Concentration Risk and Market Dependence

Nvidia’s influence on U.S. equities is staggering. The stock accounts for roughly 8.5% of the S&P 500’s total weight, the highest proportion on record for a single company. By comparison, Apple and Microsoft peaked at 7.7% and 7.4%, respectively, during their market heydays. Together, the seven largest tech stocks now represent more than 36% of the index, underscoring a degree of concentration unseen since the late 1990s.

Such concentration raises structural risks for index-linked portfolios and passive funds. The S&P 500’s performance increasingly hinges on Nvidia’s share price, meaning volatility in one company could reverberate across trillions in investor assets.

The Growth Paradox

At Nvidia’s scale, most companies experience decelerating growth — but not this one. Its revenues are still projected to expand nearly 60% this fiscal year, far above the 6% average for mega-cap firms exceeding $100 billion in annual sales. By comparison, Microsoft is expected to post 15% growth, Apple 6.2%. This sustained acceleration has left analysts scrambling to recalibrate what “maturity” means in the AI era.

Still, history cautions that no company grows exponentially forever. “Trends like this reach a climax point and reverse,” Miskin noted. “For the time being, AI leaders are dominating earnings, but the S&P is putting a lot of eggs into one basket.”

Bullish Consensus — With a Lonely Skeptic

About 91% of Wall Street analysts rate Nvidia a “buy,” with HSBC recently setting a price target that implies an $8 trillion valuation. Yet one contrarian — Seaport Global’s Jay Goldberg — maintains a sell rating and a $100 target, even as the stock has more than doubled this year. The debate encapsulates the tension between technological optimism and valuation realism.

Meanwhile, Nvidia CEO Jensen Huang’s personal fortune has soared alongside the stock. His net worth now sits around $176 billion, up $60 billion in 2025 alone — a measure of both Nvidia’s dominance and the market’s euphoria.

The Road Ahead

Whether Nvidia’s $5 trillion milestone marks a sustainable new plateau or a peak of exuberance will depend on the trajectory of global AI investment. For now, capital inflows remain robust, supported by corporate demand for compute power and investor conviction that AI is a secular, not cyclical, trend.

But history offers reminders — from the dot-com boom to the FAANG consolidation — that innovation-led markets eventually rebalance. Nvidia’s next earnings report in mid-November may provide the first real test of whether the fundamentals can continue to justify the world’s richest valuation.