NVIDIA (NASDAQ:NVDA) solidly hurdled the $4 trillion in market cap hurdle this past week as news emerged that the AI chip firm will resume shipments to China.
NVIDIA is the first and only publicly traded firm to achieve this valuation. It was not that long ago when the punditry was breathless when Apple topped the $1 trillion mark. How times have changed.
Madeleine Black, Associate Analyst for Passive Strategies at Morningstar, says NVIDIA’s China news could reignite one of the firm’s biggest growth markets. At the same time, Black notes that the top five US stocks now account for 25% of the large-cap indexes, while having generated more than half of all equity gains in the past five years.
“With the average global large-cap blend fund allocating 67% to US equities and US stocks accounting for 62% of the global market, passive flows are more exposed than ever. Market-cap-weighted strategies are coming under scrutiny for chasing price momentum and potentially fuelling bubbles, while equal-weighted alternatives like Xtrackers S&P 500 Equal Weight are gaining traction.”
First, it is astounding that NVIDIA easily surpasses the FTSE 100, as its market cap does not even breach $3 trillion. UK policymakers need to take action on this issue. The warning bells have been ringing for years. But don’t hold your breath.
Second, where do you put some of your money if, as Black expresses, you should consider the possibility of a Mag 7 bubble? Black recently (April 2025) wrote about ETFs available for Europeans, which can balance US big cap concentration.
And then there is the option of private securities, a market that continues to grow, which can provide investors with pre-IPO securities from many well-known firms. There are initiatives in both the US and the UK that aim to make shares in private firms more accessible. This trend is expected to continue accelerating in the years to come.
