Putting a number on the poster boy of the stock market

That is an absolutely staggering number if you think about it. And as the world continues to embrace the AI-driven future, Nvidia is now the poster boy not only for that revolution but also for the stock market. After its struggles in the first four months this year in the run up to Trump’s Liberation Day, the share price has now doubled to fresh record highs. Nvidia is also sitting prettily with 29% gains year-to-date, comfortably outpacing the S&P 500 which holds 7% gains.

And with around 36,000 employees, Nvidia has a per-employee market value of over $110 million. That continues to speak to the sheer size that the stock has grown in the past two years especially.

Now, $4 trillion (to be precise it is $4.2 trillion at time of writing) in market cap is a milestone number. But how exactly is that showing up when looking into equity indices? That’s a crucial thing that investors need to be wary about.

Given where it stands, it’s no surprise that Nvidia now holds the largest weightage on both the S&P 500 and Nasdaq. It commands around 7.5% in the former (Microsoft in second at 6.7%) and 14.2% in the latter (Microsoft also in second at 12.8%).

It wasn’t too long ago that things were still pretty much a three horse race between Nvidia, Microsoft, and Apple. However, it is starting to get clearer now that Nvidia is going to be the one pulling away.

While the top-heavy constituents of the S&P 500 and Nasdaq continue to revolve around the Mag 7 stocks, how does Nvidia’s staggering rise fare when looking at global indices?

Well, this is one that might surprise you a little.

When looking at the MSCI All Country World Index (ACWI), Nvidia also tops that easily with a record 4.73% weightage as of yesterday. That is followed by other Mag 7 companies namely Microsoft, Apple, Amazon, and then Meta. But outside of Microsoft, all the others have weightages well under 4% in the index.

But what is it about Nvidia’s share that makes it special?

First, some context is needed about the index. The MSCI ACWI covers large and mid-cap stocks across 23 DM and 24 EM countries. And with 2,528 constituents, it represents roughly 85% of global equity markets.

So, the thing about Nvidia’s share here is that it has now also outpaced all the constituents for Japan put together (4.65%). Japan is the world’s third largest stock market mind you. And this neat chart here shows how Nvidia is also easily outpacing the stock market share of other major countries:

That’s rather staggering with Nvidia’s contribution now being almost double France and Germany combined. A momentous occasion would even be an understatement here.

Now, US stocks do hold the most weightage on the MSCI ACWI with nearly two-thirds of the index comprising of the shares from Wall Street. But it is with the rise of Nvidia amid the AI boom that’s continuing to push the boundaries and diminish the significance of shares from other countries in the index.

The question now will be can Nvidia keep up this surging run in the years ahead? A lot of that will depend on AI developments and how the functionality continues to impact our every day lives. From things like productivity to the impact on labour market and essential living, it’s a question of how much of the future is going to be integrated with the use of AI?

No doubt it’s been a revelation over the past few years. But just like the Internet boom in the 2000’s, it’ll be a whole different ballgame when this kind of convenience, access, and every day living becomes the norm. For now though, Nvidia continues to thrive as one of, if not the leader, of the space.

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