The world’s leading AI chipmaker has experienced a market correction that miners know all too well. Over the past eight weeks, Nvidia has lost roughly $1 trillion in market capitalization—equivalent to the combined value of five companies the size of BHP. Yet over the past year, the global mining sector has quietly outperformed Big Tech in terms of share price growth, prompting fresh questions about how financial markets value tangible assets.
A year ago, Nvidia became the first company in history to reach a $4 trillion valuation. At the time, its market capitalization was 2.7 times larger than that of the world’s 50 largest mining companies combined. Today, that gap has narrowed to 2.3 times, and on several trading days in July it briefly fell to just two times. The last time the ratio dropped that low was when Chinese AI startup DeepSeek rattled markets with its low-cost artificial intelligence model.
Between May and early July, Nvidia’s market value declined by approximately $1 trillion. At the bottom of the selloff, its shares traded at a forward price-to-earnings ratio (P/E) of 18, below the average for the S&P 500. For a brief period, the flagship company of the AI era appeared, at least on paper, to be undervalued. The multiple has since recovered to around 20, but major mining companies remain considerably cheaper, with an average forward P/E of about 13.
The MINING.COM TOP 50 index also experienced a volatile quarter. At the end of March, the combined market capitalization of the world’s largest miners reached a record $2.4 trillion, but the subsequent decline in gold prices below $4,000 per ounce erased approximately $228 billion in value. Today, Nvidia’s market capitalization stands at $5.11 trillion, compared with $2.19 trillion for all companies in the TOP 50 combined. However, over the past twelve months, the mining sector has gained 47%, compared with 27% for Nvidia—marking the first time mining has outperformed the AI chipmaker on an annual basis.
The underlying question remains unchanged: the stock market continues to assign a far higher valuation to companies that enable the digital economy than to those producing the physical materials that make it possible. The $1 trillion Nvidia lost in just two months is roughly equal to the total value of the TOP 50 mining index throughout much of this decade.
The conclusion is difficult to ignore. Rebranding raw materials as critical minerals was a useful first step, but the industry now needs a broader effort to educate investors. The old saying remains as relevant as ever: “If it can’t be grown, it has to be mined.” That applies to silicon, copper, gold, silver, tungsten, tantalum, titanium, cobalt, aluminum, tin, nickel, hafnium, ruthenium, molybdenum, indium, palladium, gallium, germanium, arsenic, antimony, bismuth, boron, phosphorus, and a host of rare earth elements—the very materials from which Nvidia’s chips are built.
While Big Tech generates trillion-dollar swings with movements on a stock chart, the mining industry quietly supplies the physical foundation that makes the digital revolution possible. Perhaps it is time for investors to look not only at computing power, but also at the materials that make computing possible.
Source: MINING.COM
