Previously a minor business best known for its graphics chips in the gaming community, Nvidia has suddenly become the world’s most valuable public company. With a 3.6% increase in shares on Tuesday, Nvidia’s market capitalization surpassed Microsoft’s $3.32 trillion to an astounding $3.34 trillion. This accomplishment comes after Nvidia’s earlier one earlier this month, when it became the first company to surpass Apple and break the $3 trillion threshold.
This year, Nvidia’s share price has increased by an astounding 170%, helped by the company’s May first-quarter results report. This astounding rise, which has seen the stock increase by more than nine times since the end of 2022, is consistent with generative artificial intelligence’s rising popularity.
In the meanwhile, following a 1.1% decline in shares on Tuesday, Apple’s market worth marginally decreased to $3.29 trillion. Currently, Nvidia holds over 80% of the market share for AI processors used in data centers. As digital behemoths like OpenAI, Microsoft, Alphabet, Amazon, and Meta race to get their hands on the processors needed to construct and run large-scale AI models, this industry has grown dramatically.
The data center division of Nvidia recorded a startling 427% revenue rise in the most recent quarter compared to the same period last year, reaching $22.6 billion, or almost 86% of the company’s total revenues. Since its founding in 1991, Nvidia has expanded into the cryptocurrency mining chip and cloud gaming subscription markets, having first concentrated on selling chips to gamers so they could run 3D games.
Nvidia’s stock has surged over the last two years as Wall Street acknowledged the company’s critical role in the AI revolution. According to Forbes, this increase has increased co-founder and CEO Jensen Huang’s net worth to almost $117 billion, placing him as the 11th richest person in the world.
Even if its stock price has increased by 20% this year, Microsoft has profited greatly from the AI boom as well, especially from its large investment in OpenAI and the incorporation of AI models into important products like Windows and Office. Microsoft is one of the biggest purchasers of Nvidia GPUs for its Azure cloud service, and it is now expanding its AI capabilities with new laptops with the Copilot+.
Nvidia’s rapid ascent to the top has been so swift that it has yet to be included in the Dow Jones Industrial Average, which consists of 30 of the most valuable U.S. companies. Nvidia’s recent 10-for-1 stock split, effective June 7, enhances its prospects for inclusion in the Dow, a price-weighted index where companies with higher stock prices exert greater influence on the benchmark.
