Nvidia Surpasses Microsoft In Market Cap To Become The Most Valuable Public Company

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Nvidia, traditionally recognized within the gaming community for its graphics chips, has now become the world’s most valuable public company.

The chipmaker’s shares rose 3.6% on Tuesday, pushing its market capitalization to $3.34 trillion, exceeding that of Microsoft, now valued at $3.32 trillion. Earlier this month, Nvidia surpassed Apple to achieve a $3 trillion valuation for the first time.

Nvidia’s stock has surged over 170% this year, notably spiking after the company reported strong first-quarter earnings in May. Since the end of 2022, Nvidia’s stock price has multiplied more than ninefold, coinciding with the rise of generative artificial intelligence.

On Tuesday, Apple’s shares dropped 1.1%, resulting in a market value of $3.29 trillion for the iPhone maker.

Nvidia commands approximately 80% of the market for AI chips used in data centers, a sector that has expanded rapidly as major tech firms like OpenAI, Microsoft, Alphabet, Amazon, Meta, and others compete to acquire processors essential for AI model development and large-scale workloads.

In its most recent quarter, Nvidia’s data center revenue surged 427% year-over-year to $22.6 billion, constituting about 86% of the company’s total sales.

Established in 1991, Nvidia initially focused on selling chips for gaming to power 3D games. Over time, it has diversified into areas such as cryptocurrency mining chips and cloud gaming subscriptions.

In recent years, Nvidia’s stock has soared as investors recognized its pivotal role in driving the AI revolution. This surge in stock price has boosted the net worth of co-founder and CEO Jensen Huang to approximately $117 billion, making him the 11th richest person globally according to Forbes.

Microsoft’s shares have risen about 20% this year, benefiting significantly from the AI boom after making substantial investments in OpenAI and integrating its AI models into core products like Office and Windows.

Microsoft is also a major purchaser of Nvidia’s GPUs for its Azure cloud service and recently launched new laptops optimized for running AI models, branded as Copilot+.

Nvidia’s rapid ascent has positioned it as a contender for the title of the most valuable U.S. company, a position that Apple and Microsoft have alternated holding in recent years.

Despite its rapid rise, Nvidia has not yet been included in the Dow Jones Industrial Average, which tracks the stock performance of 30 leading U.S. companies. In conjunction with its earnings announcement last month, Nvidia implemented a 10-for-1 stock split effective June 7, which could enhance its chances of joining the Dow as it is a price-weighted index favoring companies with higher stock prices.