Nvidia Topples Microsoft to become Most Valuable Public Company

Nvidia, originally renowned within the gaming community for its powerful graphics chips, has now become the most valuable public company in the world. 

On Tuesday, Nvidia's shares rose by 3.2%, boosting the company's market capitalisation to $3.33 trillion, surpassing both Microsoft and Apple. 

Earlier this month, Nvidia achieved a $3 trillion market cap for the first time, overtaking Apple.

Nvidia's stock has surged by more than 170% this year, largely driven by its dominance in the artificial intelligence (AI) chip market. 

The company's stock price has increased more than ninefold since the end of 2022, a period that coincides with the rapid rise of generative AI technologies. 

Nvidia holds approximately 80% of the market for AI chips used in data centres. This segment has seen explosive growth as major tech companies like OpenAI, Microsoft, Alphabet, Amazon, and Meta have heavily invested in the processors required for developing AI models and handling substantial workloads.

For the most recent quarter, Nvidia's data centre business reported a staggering 427% increase in revenue compared to the previous year, reaching $22.6 billion. 

This accounts for about 86% of the company’s total sales. 

In comparison, Apple and Microsoft experienced slight declines in their stock prices on the same day, with Apple's market value dropping to $3.28 trillion and Microsoft's to $3.32 trillion.

Founded in 1991, Nvidia initially focused on producing hardware for gamers to run 3D games. The company also explored other markets, including cryptocurrency mining and cloud gaming. 

However, in the past two years, Nvidia's recognition has soared as its technology became pivotal to the AI revolution, which shows no signs of slowing down. 

This surge has significantly increased the net worth of Nvidia's co-founder and CEO, Jensen Huang, to about $117 billion, making him the 11th wealthiest person in the world according to Forbes.

Microsoft, which has seen a 20% rise in its shares this year, has also benefited significantly from the AI boom. The software giant invested heavily in OpenAI and integrated AI models into its key products like Office and Windows. 

Microsoft is one of the largest purchasers of Nvidia's GPUs for its Azure cloud service. Recently, Microsoft released a new generation of laptops designed to run its AI models, called Copilot+.

Nvidia’s rapid ascent has yet to secure it a spot in the Dow Jones Industrial Average, which comprises 30 of the most valuable U.S. companies. 

To enhance its chances of inclusion, Nvidia announced a 10-for-1 stock split, effective June 7. This split makes Nvidia's stock more accessible and aligns with the price-weighted nature of the Dow index, where higher stock prices have a greater impact on the benchmark.

Nvidia's remarkable growth reflects the company's strategic positioning at the forefront of the AI revolution. With continued advancements and strong market performance, Nvidia's influence in both the tech industry and the broader market is set to expand further.
Source: https://www.cnbc.com/world/ 
Image: https://www.cnbc.com/world/