Nvidia’s $3.5T all-time high valuation is a giant wager on a very near tokenized future

Nvidia is now worth $3.5 trillion and the largest company on earth once again because Jensen Huang thinks every single thing we do is about to be broken down into tokens — not crypto tokens, but AI tokens. These are the chunks of data artificial intelligence eats, learns from, and generates.

According to the Financial Times, Jensen is betting that this massive change in how information is processed will fuel the next phase of global computing — and he’s betting everything on it.

The company reported $44 billion in revenue for the quarter ending in April, blowing past expectations with a 69% year-on-year increase. Analysts tracked by LSEG didn’t see that coming.

Nvidia holds a 71% gross margin, which is basically unheard of for a company with that kind of scale. This isn’t hype anymore. The market believes the AI chip war has already been won, and for now, it’s not even close.

Nvidia absorbs a $4.5B hit as China vanishes from the map

Nvidia’s momentum didn’t come without setbacks. The company had to write down $4.5 billion after being cut off from China, a country it previously estimated could generate $50 billion in yearly revenue. With Donald Trump back in the White House, export rules have tightened. 

Nvidia is no longer allowed to sell its best-performing chips to China and had to offer downgraded versions. Even those got blocked. Instead of trashing everything, the company repurposed unsold inventory to cushion the blow.

Somehow, despite all that, Nvidia raised its guidance. Analysts at Morgan Stanley assumed revenue for the next quarter would dip to $43.5 billion because of the $5 billion in missed China sales.

Instead, Nvidia expects $45 billion, and that’s after confirming it’ll lose $8 billion in shipments. The shortfall got even worse, but the company still thinks it can make more money.

AI factories take over where China left off

With China off the map, new players are stepping in. Saudi Arabia, the United Arab Emirates, and Taiwan are launching government-backed AI projects called “sovereign AI.”

They’re not buying hardware to compete; they’re building their own AI ecosystems with Nvidia chips at the center. Jensen is flying to Europe next week for high-level meetings that could expand this further.

Big tech is also pushing forward. Alphabet and Oracle are pouring cash into giant new data centers, and they’re going to need chips. A lot of them.

Nvidia’s newest Blackwell chips are already being snapped up faster than expected, even before they fully launch. Demand is growing fast not just because more people are using AI, but because the models themselves are now way more complex.

Jensen said these newer “reasoning” bots — the ones that think twice before answering — use up to 1,000 times more tokens per interaction than older AI tools. That means more computation, more chips, and more revenue. Apollo Global Management says data center construction alone added a full percentage point to US GDP in the first quarter of this year.

The question is: who else can keep up? AMD is doing just one-sixth of Nvidia’s revenue. Cerebras, a startup with support from Abu Dhabi, is still operating on a small scale. Even if rivals improve, Nvidia’s 71% margin gives it space to cut prices if it ever wants to squeeze them harder. Right now, no one’s really threatening its grip.

Dan Ives, a tech analyst at Wedbush, wrote after the earnings, “There is one chip in the world fueling the AI Revolution and it’s Nvidia.” The results and commentary from Jensen reinforced that point. HSBC analyst Ryan Mellor didn’t argue. He said the numbers “were good enough to avoid disappointment.”

So far, Nvidia’s dominance is holding, even with billions wiped off the table in China. As long as tokens keep multiplying and models keep growing, Jensen’s trillion-dollar bet keeps paying off.