Nvidia Becomes World's Most Valuable Company Amid AI Surge
This meteoric rise is fueled by the insatiable demand for Nvidia's graphics processing units (GPUs), considered the gold standard for training and running generative AI models
Amid unprecedented chip demand and an AI frenzy, Nvidia has rocketed to the pinnacle of global market capitalization.
Tuesday saw Nvidia's shares rally by 3.5%, propelling its market value to a staggering $3.34 trillion. This decisive move dethroned both Microsoft and Apple, who had been locked in a recent battle for the top spot.
This meteoric rise is fueled by the insatiable demand for Nvidia's graphics processing units (GPUs), considered the gold standard for training and running generative AI models, the popular name being OpenAI's ChatGPT.
Year-to-date, Nvidia's stock price has skyrocketed over 170%, with a staggering 1,100% increase since its October 2022 low. In its incredible five-year run, its stock has skyrocketed over 3,300%.
The company now stands as the largest public firm in the U.S., ahead of the internet giant Microsoft. This comes just a few weeks after it leapfrogged Apple in second place, becoming one of the three companies to hit the $3 trillion milestone.
Emmanuel Oyedeji
Nvidia's ascent to the $3 trillion mark is particularly noteworthy for its speed. It took a mere 96 days for the company to bridge the gap from $2 trillion. This stands in stark contrast to Microsoft and Apple, who required 945 and 1,044 days respectively, according to Bespoke Investment Group.
Only 11 U.S. companies since 1925 have ever held the coveted title of world's most valuable company based on closing market value according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.
Notably, Nvidia's impressive financial performance over the past year is a strong foundation for its recent stock rally. The company reported a threefold increase in revenue to $26 billion in the latest quarter, with net income jumping a staggering sevenfold to $14.9 billion. Analysts forecast continued growth, with revenue expected to double to $120 billion in the current fiscal year, followed by another 33% rise to $160 billion in fiscal 2026.
Meanwhile, analysts warn that "Nvidia's run has been incredible, but it must sustain its growth trajectory and fend off competition to maintain its stellar stock performance."
That said Nvidia remains the current darling of the AI revolution dominating the vast majority of the AI chip market. This dominance is fueled, in part, by the intense competition between tech heavyweights such as Microsoft, Alphabet, Meta and Apple battling to power their AI advancements, all while relying heavily on Nvidia AI chip technology.
