Microsoft vs. Nvidia Race Toward $5 Trillion: Who Takes the Crown?
Chinese-owned industries aside, the AI era is now defined by two names: Nvidia and Microsoft. Nvidia already holds the distinction of being the first company to reach a $4 trillion valuation. Microsoft followed shortly after, crossing that threshold on July 31, 2025, after a standout earnings report driven by AI and Azure growth.
Nvidia is valued at around $4.4 trillion, while Microsoft sits at just over $4 trillion and both are solidly above competitors like Apple and Meta and their new rival OpenAI.
Analysts project that Nvidia could hit $5 trillion before year-end 2025, driven by massive AI demand, easing export restrictions to China, and renewed GPU sales. Wedbush analysts estimate the company needs a roughly 25% stock price rise, lifting it from about $164 to $205 per share, to reach that milestone.
In parallel, Microsoft's ambition is clear: having just exceeded $4 trillion, its aggressive capex push with over $30 billion per quarter, notably $100 billion annually, signals a full-throttle investment in AI infrastructure and talent. Azure alone generated over $75 billion in annual revenue, rising 34–39% year-over-year, helping to justify analyst predictions that Microsoft could also reach $5 trillion within 18 months.
Here's a quick comparison:
Why Nvidia appears better positioned for $5 trillion first:
- Unmatched dominance in AI chips with 75–80% global market share
- Renewed access to Chinese markets via resumed H20 chip sales, unlocking potentially $10–15 billion in revenue and boosting its market cap beyond $4.1 trillion.
- Strong momentum amplified by Nvidia’s central role in powering AI infrastructure across major tech firms.
Why Microsoft could still race ahead towards $5 trillion:
- Broader business segments, ranging from cloud and enterprise software to LinkedIn and Xbox, can provide diversified revenue streams
- Deep integration with OpenAI and large-scale AI tools such as Microsoft 365 Copilot drives consistent demand
- Massive capex and strong Azure growth support sustained expansion across corporate enterprise.
So, who's the clear winner?
Well, Nvidia currently leads with a slightly higher valuation and momentum, and is widely expected to reach the $5 trillion mark first, and is a clear winner (for now).
Microsoft isn’t far behind and has the financial firepower to reach that milestone too (especially if AI-driven enterprise adoption remains strong).
Both companies are rewriting the rules of the global market as AI transformation accelerates. The next trillion-dollar milestone may well come down to execution, investor confidence, and geopolitics.
