Nvidia Surpasses Apple and Microsoft and Become the Most Valuable Company in the World

Nvidia has surpassed Apple and Microsoft to take the top spot as the most valuable company in the world for the first time.

Just two weeks after dethroning Apple (AAPL) as the second most valuable company in the world, Nvidia (NVDA) surpassed Microsoft (MSFT) on Tuesday.

In New York, the artificial intelligence (AI) chip manufacturer Nvidia’s stock increased by 3.5 percent, valuing the company at $3.34 trillion (£2.63 trillion).

With a market capitalization of $3.32 trillion, Microsoft, which had been leading, was not far behind, and Apple had a $3.29 trillion valuation.

A surge of enthusiasm over the potential applications of AI technology has seen Nvidia’s shares rise by 180 percent this year and by nearly 4,500 percent over the previous five years.

When it comes to creating the powerful chips that are essential to the advancement of artificial intelligence, Nvidia is regarded as the leader.

Despite the significant gains, some analysts predict that Nvidia’s value will increase significantly in the future.

Hans Mosesmann, an analyst with Rosenblatt Securities, predicted that the share price could increase from $136 to about $200. In doing so, the company’s value would approach $5 trillion.

Wedbush Securities analyst Daniel Ives stated: “We believe over the next year the race to $4 trillion market cap in tech will be front and centre between Nvidia, Apple, and Microsoft.”

As companies use AI, he continued, Nvidia’s chips ought to be viewed as “the new gold or oil.”

For weeks, Nvidia, Microsoft, and Apple have been competing to be named the most valuable company in the world. Wednesday of last week,

After revealing updates to its iPhone software that will be powered by artificial intelligence (AI), Apple momentarily overtook Microsoft to claim the title.

Microsoft, on the other hand, has advanced after acquiring ChatGPI creator OpenAI and adding AI capabilities to Windows.

Executives at Nvidia have profited from the company’s spectacular stock rise. According to Bloomberg, they have sold over $700 million worth of shares this year, or around 770,000 shares. According to a regulatory filing, Nvidia CEO Jensen Huang sold $31 million worth of stock last week.

Over a 3.5% increase in share price saw Nvidia surpass $135, valuing the chipmaker at more than $3.33 trillion. Tuesday’s 0.4% decline brought Microsoft’s market capitalization to almost $3.32 trillion.

Over the past year, Nvidia’s shares have increased by over 215%, and over the previous five years, they have increased by over 3,400%. While Microsoft’s stock has increased by a little over 19% in 2024, Nvidia has gained 175% so far this year.

On June 13, 2023, Nvidia achieved its first market cap of $1 trillion. On March 1, the stock moved above $2 trillion, and on June 5, it quickly surpassed $3 trillion for the first time. The company’s market capitalization increased from $1 trillion to $3 trillion at the fastest rate ever recorded.

Due to its recent growth, Nvidia is now the largest weight in the S&P 500 (^GSPC), and its contributions to the benchmark index’s record highs in 2024 have been essential.

The S&P 500 and Nvidia’s price movement had exhibited a nearly perfect correlation up until May, which meant that an increase in Nvidia’s stock would also increase the larger index. According to data from Citi’s equity research team, as of Monday, Nvidia’s stock gains alone had contributed approximately one-third of the S&P 500’s year-to-date rise.

On June 10, Nvidia finished a 10-for-1 split.

The company’s growth coincides with the explosion of generative AI, which began in late 2022 when OpenAI released its ChatGPT platform. The ability to train and execute AI programs is built into Nvidia’s chips, customized graphics cards, and CUDA software platform, giving it a competitive edge that analysts predict will take years for competitors AMD (AMD) and Intel (INTC) to match.

The preferred supplier of AI chips and integrated software in the tech sector is Nvidia.

Tech giants like Microsoft, Tesla (TSLA), Amazon (AMZN), Google (GOOG), Meta (META), and others rely on its hardware to power their own AI models and services in addition to their cloud-based AI offerings for clients.

CEO Jensen Huang revealed the company’s plans to launch a new AI chip platform, Rubin, in 2026 and a more powerful Blackwell chip, known as the Blackwell Ultra, in 2025 during a keynote address at the Computex conference in Taiwan on June 2. In 2027, the business will introduce an Ultra version of Rubin.

Nvidia reported first-quarter adjusted earnings per share of $6.12 on $26 billion in revenue, up 262% and 461%, respectively, over the same period last year.

In the latest quarter, Nvidia’s data center revenue climbed by 427% year over year to $22.6 billion, making up 86% of the company’s overall revenue for the same period. $2.6 billion was made by Nvidia’s gaming division, which was previously its most significant business.

To outmaneuver Nvidia, however, AMD and Intel are making progress with their own AI chips. AMD recently revealed that its next-generation MI400 AI accelerator platform will launch in 2026 and that its MI325X and MI350 will go on sale in 2024 and 2025, respectively.

Meanwhile, Intel announced that the price of its Gaudi 2 and Gaudi 3 AI accelerators will be lower than that of rival chips. And any cost savings will be greatly appreciated, as businesses are shelling out billions for AI chips.

As Amazon, Google, and Microsoft try to wean themselves off of their reliance on Nvidia’s chips and save on capital expenditures while they’re at it, Nvidia is also up against increasing competition from its own clients.