AI boom drives trillion-dollar tech valuations and record bets on chipmakers

Top technology companies hit fresh valuation milestones in October, as their shares climbed on expectations of robust demand for AI chips and computing infrastructure driven by the artificial intelligence boom.

Nvidia's shares jumped nearly 11% over the past month, adding about $500 billion in market value as it became the first company to reach a $5 trillion valuation. Chief executive Jensen Huang this week announced $500 billion in AI chip orders and plans to build seven supercomputers for the US government.

Tech shares have risen sharply on optimism over AI's potential and a series of partnerships and deals with major global companies, including OpenAI, Oracle, Nokia and drugmaker Eli Lilly.


Microsoft and Apple also reached $4 trillion market valuations by end-October, just over three months after Nvidia's surge to that level in July.

Microsoft reported record capital spending of nearly $35 billion for its fiscal first quarter on Wednesday and said it expects investments to rise further this year

Broadcom gained 17% over the past month to reach a $1.82 trillion valuation, while TSMC added 15% to $1.28 trillion and Alphabet climbed 13% to $3.32 trillion.

The market value-to-capital expenditure ratio for semiconductor firms stood at 75.1, the highest among all global sectors, suggesting investors expect strong returns from the heavy AI-related spending by chipmakers.

The market values of Berkshire Hathaway, JPMorgan Chase and Tencent Holdings fell 5.4%, 3.1% and 2.5% over the past month to $1.03 trillion, $840 billion and $760 billion, respectively.