Nvidia Defies Gravity as Market Capitalization Surpasses $5 Trillion
Nvidia's market capitalization has surpassed $5 trillion, making it the largest company in the world by that metric. The chipmaker briefly lost its crown to Apple in July but regained it and remains the only company with a market cap over $5 trillion.
Despite Nvidia's massive size, its revenue and net income are still growing faster than its share price. Over the last five years, Nvidia's revenue has increased by 1,150% and its net income has soared by 2,250%, while its stock is up 'just' 821%. This means that from a valuation perspective, Nvidia's shares are much cheaper than they were five years ago.
Nvidia's current trailing price-to-earnings (P/E) ratio of 26.7 is at a five-year low and lower than Apple's P/E of 38.2. However, investors may be concerned about Nvidia's reliance on sustained AI infrastructure spending for its revenue and profit streams.