MUMBAI: Nvidia, the global US-based chip giant at the forefront of the ongoing AI revolution, now has a market capitalization exceeding the total market cap of all companies listed in India. Compared to the company's valuation of $4.91 trillion during opening trades on Friday, India's total market cap stood at $4.88 trillion when local markets closed Thursday, according to Bloomberg data.
Nvidia's Meteoric Rise
In the last few years, surging demand for AI chips has more than doubled Nvidia's market cap from about $2 trillion exactly two years ago. In 2023, it became the first company in history to hit the $1 trillion market cap, and early last year it became the first to reach the $4 trillion valuation mark. On October 29 last year, the chip giant became the first company to hit the $5 trillion market cap. Since then, it experienced a rough patch on Wall Street, hitting a low of $4.2 trillion on March 20 this year. However, the revival of the AI rally has restored the Santa Clara, California-based company's total market value.
Indian Market Under Pressure
In contrast, the Indian market has seen its market cap remain almost unchanged on a point-to-point basis, mainly due to selling by foreign funds and the weakness of the rupee. Between these points, it spiked to an all-time high of $5.9 trillion by end-September 2024, around the time the Sensex crossed the 86,000 mark for the first time in history. Last week, Nvidia's market cap crossed the $5 trillion mark to hit an all-time high of $5.3 trillion.
According to market players, by September 2024, the valuations of the two leading Indian indices—Sensex and Nifty—were at multi-year highs (over 25x price-to-earnings for Sensex and over 24x for Nifty). Around that time, valuations in several other emerging market countries were much lower. Additionally, the growth of Indian firms faltered. The combined effect prompted foreign funds to book profits in the Indian market and invest where valuations were cheaper.
Global Context
In the last two years, while Nvidia and several other global tech giants have seen their market values jump substantially, led by AI-driven demand and spending, the Indian market has been witnessing substantial volatility with a downward bias.
