Nvidia, once primarily known within the gaming community for its graphics chips, has ascended to become the most valuable public company globally. The company’s shares surged by 3.6% on Tuesday, raising its market cap to $3.34 trillion and surpassing Microsoft, now valued at $3.32 trillion. Earlier this month, Nvidia’s market cap hit $3 trillion for the first time, overtaking Apple.
The stock has appreciated more than 170% this year, with significant gains following the company’s first-quarter earnings report in May. Since the end of 2022, Nvidia’s stock has multiplied over ninefold, in parallel with the rise of generative artificial intelligence.
On Tuesday, Apple experienced a 1.1% decline in its shares, bringing its market value to $3.29 trillion.
Nvidia commands approximately 80% of the AI chip market used in data centers, a sector that has expanded as companies like OpenAI, Microsoft, Alphabet, Amazon, and Meta increasingly acquire the processors needed for AI model development and large-scale workloads. In the most recent quarter, Nvidia’s data center business revenue soared by 427% year-over-year to $22.6 billion, making up about 86% of the company’s total sales.
Founded in 1991, Nvidia initially focused on selling hardware chips for gamers to run 3D titles and also ventured into cryptocurrency mining chips and cloud gaming subscriptions. However, in the last two years, Nvidia’s shares have skyrocketed as its technology has become recognized as pivotal to the booming AI industry. This rally has propelled co-founder and CEO Jensen Huang’s net worth to about $117 billion, ranking him as the 11th wealthiest individual globally, according to Forbes.
Microsoft’s shares have risen by approximately 20% this year. The software giant has also benefited significantly from the AI boom, following its substantial investment in OpenAI and the integration of AI models into its core products, including Office and Windows. Microsoft is a major purchaser of Nvidia’s graphics processing units (GPUs) for its Azure cloud service and recently launched a new generation of laptops designed to run its AI models, known as Copilot+.
Nvidia’s rapid rise to becoming the most valuable U.S. company marks a notable shift. Previously, Apple and Microsoft alternated holding this title. Nvidia has not yet been added to the Dow Jones Industrial Average, which consists of 30 of the most valuable U.S. companies. Alongside its earnings release last month, Nvidia announced a 10-for-1 stock split, effective on June 7. This split enhances Nvidia’s potential inclusion in the Dow, a price-weighted index where companies with higher stock prices have a greater influence.
