Nvidia breaches $5 trillion in market cap

(Reuters) -Nvidia on Wednesday became the first company to breach $5 trillion in market value, continuing a meteoric rise that has firmly positioned it at the heart of the global AI revolution.

Share milestone:--- Nvidia shares hit record high of $209.40 in early trading-- Shares up 1087% pct since the launch of ChatGPT in Nov 2022

-- S&P 500 index has risen 68.9% since Nov 2022

Here are reactions from analysts and investors:-

MATT BRITZMAN, SENIOR EQUITY ANALYST, HARGREAVES LANSDOWN THAT HOLDS SHARES IN NVIDIA"Nvidia hitting a $5 trillion market cap is more than a milestone; it's a statement, as Nvidia has gone from chip maker to industry creator."

"For investors who think they've missed the boat, even at $5 trillion of market cap, this still isn't an overly expensive stock. The market continues to underestimate the scale of the opportunity, and Nvidia remains one of the best ways to play the AI theme."

KIM FORREST, CHIEF INVESTMENT OFFICER AT BOKEH CAPITAL PARTNERS IN PITTSBURGH"They have earned this victory lap. At this point, the great AI bubble doesn't look like it's close to popping. And so this is what we get: a $5 trillion company because it makes the things that are driving the AI cycle."

"There seems to be a lot of demand for data centers to be built, and that points to Nvidia over and over and over again."

RUSS MOULD, INVESTMENT DIRECTOR AT AJ BELL"Nvidia has added $2.5 trillion in market cap since the post-Liberation Day low in April, more than doubling its stock market value. It has been helped by talk of exemptions and revenue-sharing deals when it comes to the tariffs and trade tensions and any successful conclusion to the Asian summit between Presidents Trump and Xi this week could be a further boost to sentiment."

MICHAEL BROWN, SENIOR RESEARCH STRATEGIST, PEPPERSTONE"In many ways everything that sort of could have gone right for the firm has gone right over the last sort of 24 hours. We had all of these strategic partnerships being announced yesterday and some very solid guidance from CEO Jensen Huang who was talking about $500 billion worth of business in the next five quarters."

"One of the key drivers of whether Nvidia can extend on these gains even more is going to be the CapEx projections from some of these mega cap names. If it's like the second quarter where we have another quarter of just huge increases in capital expenditure, the bulk of which is obviously going to go on NVIDIA chips, then there's absolutely no reason for the rally to run out of steam."

ARTHUR R HOGAN III, CHIEF MARKET STRATEGIST, B. RILEY, US"The milestone reinforces the fact that the chip maker is the clear winner at this stage of the AI revolution. Importantly Nvidia's assent has come with defensible valuations. The companies stock trades at 35 times next twelve months earnings estimates, while producing 70% gross margins."

"While the $5 trillion milestone seems unfathomable in a historic context, it comes in the wake of a company that has managed to outperform on all metrics, while cutting strategic deals with all of the key players in the sector and successfully navigating the challenging political landscape."

DANIELA HATHORN, SENIOR MARKET ANALYST AT CAPITAL.COM, SPAIN"What's been driving Nvidia is, on one hand, general market euphoria and optimism. We've got not only Nvidia but also major equity indices pushing to all-time highs, and I don't think it's luck. It's a combination of fundamental factors: easing inflation and the prospect of lower monetary policy."

"But at the same time, we also have an AI-driven capex boom - specifically in the chip sector and the hardware and cloud infrastructure sectors. So, I think you've got a structural growth narrative that extends beyond just a cyclical rebound. To some extent, the AI bubble that's been talked about isn't really a bubble, because it's backed by fundamentals and, frankly, by earnings growth."

IPEK OZKARDESKAYA, SENIOR MARKET ANALYST AT SWISSQUOTE BANK, SWITZERLAND

"There's tremendous potential for Nvidia to strike more deals—think Nokia, for example. The question isn't if Nvidia will ink new partnerships, but who's next. They're expanding beyond borders, and we believe this international exposure will help ease concerns around circularity."

"Nvidia doesn't need Trump's backing the way Intel might. What Nvidia is doing is positioning itself close to the White House for deals that could be costly—like investing in Intel or building chips in Arizona. These are the costs of doing business with Washington. But beyond that, Nvidia doesn't need Trump to generate revenue. It just needs him not to stand in the way."

(Reporting by Joel Jose, Avinash P, Akriti Shah, Johann Cherian and Nikhil Sharma in Bengaluru; Editing by Sweta Singh)