This single company is now as big as India: Nvidia’s $4 trillion valuation
- Kiran S N
- Jul 11
- 3 min read
In July 2025, Nvidia hit a $4 trillion market cap, becoming the most valuable company in the world. For perspective, that’s roughly equal to the entire nominal GDP of India, a country with 1.4 billion people and the world’s fourth-largest economy. It’s a headline that feels surreal and one that raises as many questions as it does eyebrows.
All-time high
This came during a week when the S&P 500 hit an all-time high of 6,280.4, driven by continued optimism in tech, AI, and hopes in the U.S. economy. The Nasdaq is also in record territory, with mega-cap stocks led by Nvidia doing the heavy lifting. Nvidia alone now makes up 7.1% of the S&P 500 and 13.65% of the Nasdaq 100, meaning market direction is increasingly tied to its performance. But this sharp rally has started to raise concerns. Valuations are rich across the board, and participation is narrow. Much of the index’s gains are concentrated in just a few names, making it fragile if sentiment on AI or big tech turns. With earnings growth expected to moderate in H2 2025, and the Fed staying non-committal on rate cuts, downside risk from elevated levels is very real.
(Further reading on valuations: https://www.finsightsbysquareleague.com/post/are-us-markets-overvalued-buffett-indicator-and-valuation)
Coming back to Nvidia...
The numbers are hard to ignore. Since early 2023, the stock has surged over 700%, powered by AI demand and dominance in data centre GPUs. In FY25, Nvidia posted $130.5 billion in revenue, up from just $60.9 billion in FY24. Net income jumped to $72.9 billion, compared to $19.8 billion the year before. In Q1 FY26, it reported $44.1 billion in revenue, with $39.1 billion coming from data centres alone.
What’s driving this dominance?
Nvidia controls 92% of the discrete GPU market, and its CUDA software stack keeps developers locked into its ecosystem. It’s the go-to supplier for hyperscalers like AWS, Microsoft, Meta, and Google. Its fabless model, with manufacturing outsourced to TSMC, allows it to focus purely on design and scale.
Risk
But this success comes with risk. 87% of Nvidia’s revenue in Q1 FY26 came from a handful of customers, many of whom are now building their own AI chips; AWS with Trainium, Meta with MTIA, and Microsoft with Maia. Nvidia’s moat is under pressure, not just from competition like AMD (whose MI300X is seeing uptake), but also from shifting software stacks that are moving toward hardware-agnostic frameworks.
Then there’s geopolitical risk. Nvidia relies entirely on TSMC, located in Taiwan, for advanced chip production. Any disruption in that region would immediately impact supply. Meanwhile, the company is trading at a forward P/E of ~32, a level that assumes continued hypergrowth. But growth forecasts beyond FY26 are already moderating, and over $1 billion in insider stock sales this year doesn’t exactly scream long-term conviction.
Takeaway
Nvidia is undoubtedly the poster child of the AI era....but it’s priced for perfection. And when a single company is valued as much as an entire economy, the upside may be limited unless the fundamentals continue to beat expectations.
As for the broader market, this rally has legs only if earnings growth, liquidity conditions, and sentiment stay aligned. Right now, optimism is running hot. If there's any misstep be it slowing AI capex, disappointing earnings, or macro shocks markets could quickly unwind.
It’s a moment to stay alert, not euphoric.
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