Should You Buy NVIDIA as It Nears $5T Market Cap? ETFs in Focus

NVIDIA NVDA shares surged about 5% on Oct. 28, 2025, to inch closer to making history, which is $5 trillion in market cap. The AI chip giant touched a market cap of $4.894 trillion to be specific.

NVIDIA is on its way to becoming the first-ever company to surpass a $5 trillion market valuation, thanks to the AI boom. The rapid rise came just months after crossing the $4 trillion threshold in July, as quoted on Yahoo Finance.

Multiple Deals Announcements Aid the Rally

At the heart of the recent rally is a wave of updates unveiled during NVIDIA’s GTC event in Washington, D.C. The company revealed that it is working with the U.S. Department of Energy to create seven new supercomputers (per CNN), including one powered by a staggering 10,000 Blackwell GPUs. The deal shows NVIDIA’s growing dominance in fueling national-level AI projects.

There was a collaboration with Uber. NVIDIA plans to build 100,000 self-driving cars in partnership with Uber starting in 2027, using its chips and “DriveOS” autonomous vehicle operating system (per CNN).

There was a deal with Eli Lilly for providing 1,000 GPUs. NVIDIA is also teaming with Nokia on next-generation 6G development, alongside expanding telecom partnerships with Cisco and T-Mobile (per Yahoo Finance). The company highlighted robotics advancements too, with companies like Amazon, Foxconn, Caterpillar, and others, per Yahoo Finance.

Chip Industry Tailwinds Add Fuel

The bullish case for NVIDIA is further amplified by its supply chain dynamics. South Korea’s SK Hynix, one of NVIDIA’s critical memory suppliers, announced that its entire 2026 production has already sold out (per Reuters), citing an extended chip “super cycle” driven by AI data-center spending. This environment gives NVIDIA continued leverage and long-term visibility into future earnings growth.

U.S.-China Trade Deal in the Cards?

The U.S. President Donald Trump said he expects to cut fentanyl-related tariffs on China ahead of his meeting with President Xi Jinping in South Korea this week, as quoted on CNBC. Speaking aboard Air Force One, he said fentanyl flows and farmers will be key discussion points with Xi. A fragile trade truce between the two nations expires on Nov. 10, and Trump has warned of additional 100% tariffs on China starting Nov. 1 if no deal is reached.

NVIDIA has been facing the heat of U.S.-China trade tensions lately. Hence, if U.S.-China full-fledged trade truce takes place, NVIDIA should benefit. NVIDIA CEO Jensen Huang indicated that the United States must allow the sale of U.S.-made AI chips in China in order to make American tech companies a global center for providing artificial intelligence, per a Reuters article.

Why the $5-Trillion Market-Cap Matters

The approaching $5 trillion milestone is a great achievement. It indicates NVIDIA’s position as the key infrastructure provider in the ongoing AI boom. But this valuation raises expectations. NVIDIA must continue to deliver blockbuster revenue growth and ride out regulatory pressures such as U.S. export controls on chip technology.

NVDA stock has a Zacks Rank #2 (Buy) and a good Growth score of “B.” The return on Equity (TTM) of the NVDA is 101.74% versus 17.23% of the underlying Semiconductor – General industry. Net Profit Margin (TTM) for the stock is 52.41% versus 16.88% of the underlying industry.

ETFs in Focus

Investors seeking to capitalize on the growth story could consider investing in ETFs with the largest allocation to the AI chipmaker. These include Strive U.S. Semiconductor ETF SHOC, VanEck Vectors Semiconductor ETF SMH, VanEck Fabless Semiconductor ETF SMHX, YieldMax Target 12 Semiconductor Option Income ETF SOXY and Columbia Semiconductor and Technology ETF SEMI.

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This article originally published on Zacks Investment Research (zacks.com).

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