Nvidia Becomes World’s Most Valuable Company, Surpassing Apple and Microsoft

Highlights

• Nvidia’s market cap reaches $3.34 trillion, surpassing Microsoft and Apple.
• Shares up over 170% this year, driven by AI chip demand.
• Nvidia dominates 80% of the AI chip market used in data centers.
• Revenue in data center business rose 427% to $22.6 billion last quarter.

Nvidia, known for its graphics chips in the gaming community, is now the world’s most valuable public company.

On Tuesday, Nvidia’s shares climbed 3.6%, lifting its market cap to $3.34 trillion.

This surpassed Microsoft, now valued at $3.32 trillion.

Earlier this month, Nvidia hit $3 trillion for the first time and passed Apple.

Nvidia’s stock commenced trading on a ten-for-one split-adjusted basis on Monday, June 10, 2024. “Thanks to the recent success and performance of Nvidia, the microchip and semiconductor-producing giant, tech stocks are receiving much more attention from investors. Those who missed out on Nvidia’s rally are looking to grab onto the next hot tech stock and ride the long-term momentum. With analysts predicting a 10% annual revenue growth in tech-related industries like microchips and semiconductors, it’s easy to see why demand is so high,” says Joel Lim, financial analyst at Trading.biz.

“There’s not much downside in the markets at the moment as global stock markets continue their upward trajectory,” says Nigel Green, CEO, deVere Group, one of the world’s largest independent financial advisory and asset management organizations.

“The fact that the Federal Reserve left interest rates as they are suggests that they are not rushing things and are inclined to wait and see how the economy pans out,” says Tobi Amure, a tech analyst at Trading. Biz.

Nvidia Jumps over Apple, Microsoft

Nvidia’s shares are up over 170% this year.

The stock rose further after the company reported first-quarter earnings in May.

The stock has multiplied more than ninefold since the end of 2022, coinciding with the emergence of generative artificial intelligence.

Apple’s shares fell 1.1% on Tuesday, giving the iPhone maker a $3.29 trillion market value.

Nvidia has about 80% of the market for AI chips used in data centers.

This business has grown as companies like OpenAI, Microsoft, Alphabet, Amazon, and Meta have acquired processors to build AI models and run large workloads.

In the most recent quarter, revenue in Nvidia’s data center business rose 427% from a year earlier to $22.6 billion, accounting for about 86% of the chipmaker’s total sales.

Founded in 1991, Nvidia initially sold chips for gamers to run 3D titles.

It has also ventured into cryptocurrency mining chips and cloud gaming subscriptions.

Nvidia’s Surge with AI Hardware

Over the past two years, Nvidia’s shares have surged as Wall Street recognized the company’s technology as the engine behind the AI explosion.

The rally has lifted co-founder and CEO Jensen Huang’s net worth to about $117 billion, making him the 11th wealthiest person globally, according to Forbes.

Microsoft’s shares are up about 20% this year.

The software giant has also benefited from the AI boom, after taking a stake in OpenAI and integrating the startup’s AI models into products like Office and Windows.

Matter of fact, Microsoft is one of the biggest buyers of Nvidia’s GPUs for its Azure cloud service.

Nvidia is a newcomer to the title of most valuable U.S. company. For years, Apple and Microsoft have traded the title.

FAQs

How did Nvidia surpass Apple and Microsoft in market value?

Nvidia’s market cap surged to $3.34 trillion due to a significant rise in its stock price, driven by high demand for AI chips.

This propelled it past Microsoft and Apple in valuation.

What factors contributed to Nvidia’s rapid stock increase?

The emergence of generative artificial intelligence and Nvidia’s dominant position in the AI chip market, along with impressive revenue growth in its data center business, have driven the stock up over 170% this year.

How much market share does Nvidia hold in the AI chip sector?

Nvidia holds about 80% of the market for AI chips used in data centers, supplying major tech companies like OpenAI, Microsoft, Alphabet, Amazon, and Meta.

What was Nvidia’s revenue growth in its data center business?

Nvidia’s data center business saw a revenue increase of 427% year-over-year, reaching $22.6 billion in the most recent quarter, which accounts for 86% of its total sales.

What are some of Nvidia’s other ventures apart from AI chips?

Nvidia started with gaming chips and has expanded into cryptocurrency mining chips and cloud gaming subscriptions.

Its technology is now also recognized as a key component in the AI industry.

Should you invest in Nvidia right now?

Investing in Nvidia could be promising due to its strong market position and significant growth in the AI sector.

However, potential investors should consider market volatility, current stock price, and long-term investment goals.

Consulting with a financial advisor is recommended before making investment decisions.

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