Nvidia crosses $5 trillion market cap in early trading as BATMMAAN stocks dominate the market

It’s hardly as if investors need much of an excuse to bid up AI darlings this year, but yesterday Nvidia CEO Jensen Huang sent out a pretty big Bat-Signal, telling an audience at the company’s GPU Technology Conference that orders for Nvidia’s Blackwell and early Rubin chips were above $500 billion through 2026, while announcing a bevy of new partnerships with top companies like Palantir, CrowdStrike, and Uber.

That news helped the world’s most valuable company finish the day up 5%, leaving the chip designer with an eye-watering $4.9 trillion market cap.

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Now, Nvidia is gaining once again on Wednesday — currently up 4.8% on heavy trading volumes after a slew of positive analyst coverage, with analysts at UBS bumping their price target for NVDA to $235 and Bank of America’s taking theirs to $275. The company has soared to new heights, with shares touching $210.69 as of 9:45 a.m. ET.

With 24.3 billion shares outstanding, per Bloomberg, that puts the chip designer’s market cap over $5.1 trillion. Some people may not consider the milestone marked officially until it closes above that figure, but for now, it is undeniably true: Nvidia is the first company in history to cross the $5 trillion threshold.

Nvidia’s ascent has been nothing short of remarkable, owing to the 2018 decision from Huang and co. to “bet the farm” on AI. As its data center revenues exploded, the company found itself with the right product, in the right place, at the right time. The company’s staggering market position saw it put up financial results that defied belief: triple-digit percentage growth, margins north of 50%, and all with a workforce the size of a small Ohio town — many of whom are now millionaires. Even being shut out of China due to simmering trade tensions hasn’t stopped the stock from soaring and leaving its Big Tech peers in the dust.

But, while Nvidia is undoubtedly the talisman of the AI trade, it’s hardly alone in profiting from it. With semiconductor giant Broadcom now worth more than $1.75 trillion itself, and given that it (for now) has a more direct contribution to the AI ecosystem than Tesla, I’ve argued before that the Magnificent 7 moniker needs updating to BATMMAAN — a collection of stocks (Mag 7 + Broadcom) that are now worth ~$24 trillion collectively.

That’s a level of market dominance that most investors have never seen before in their lifetimes. Indeed, if you’re buying a sensible market-tracking index like SPY or VOO, just as sage heads such as Warren Buffett might have advised you to do, you are now, implicitly, making a large bet that America’s technology complex will continue dominating in the field of AI, with BATMMAAN now representing nearly 40% of the S&P 500’s total market cap (which is some $61 trillion).

Increasingly, the argument can be made that the BATMMAAN names are really an AI mega-cap basket, with each individual company working hard to associate their story with that of the burgeoning technology:

• Nvidia and Broadcom are at the very center of the AI trade, with their chips desired by hyperscalers the world over.

• Microsoft is arguably next closest to the metal, with multiple points of exposure to the AI theme. Its Azure division, which provides cloud services, now operates more than 400 data centers across 70 regions — the largest footprint of any cloud provider, per Microsoft — with Azure’s annual revenue surpassing $75 billion over the summer. That’s not to mention, of course, that the company directly owns a huge chunk (27%) of ChatGPT-maker OpenAI directly, and has been pushing its “Copilot” family of tools into its core productivity software suite.

• Amazon and Google also compete with Azure, via AWS and Google Cloud — and Alphabet has one of the strongest foundational models in Gemini, a product that’s had a breakthrough summer, and has a major update slated for release in December.

• Meta has made some of the most high-profile investments in AI, poaching top AI talent with insane pay packages, and doubling down on its huge capital expenditures as the company builds out its AI infrastructure — which has already helped to propel its advertising machine to new heights.

• Much of Tesla’s current market value is ascribed to its future bets on AI-powered autonomous driving and robots — a future which, as Sherwood’s Rani Molla points out, is really hard to build and increasingly expensive.

• Apple, meanwhile is the one laggard in the group when it comes to embracing AI — something Wall Street has been willing to forget about in recent weeks after strong iPhone sales.

Interestingly, Broadcom is actually the best performing of the group this year, up 64%, even outpacing Nvidia.

The next test for the BATMMAAN names will be earnings, with five of the group reporting this week: Microsoft, Meta, and Alphabet will be after the bell today, and we’ll get Apple and Amazon tomorrow.