Tuesday saw Nvidia overtake Microsoft as the most valuable corporation in the world, thanks in large part to its high-end processors, which are essential to the company’s competitive advantage in the burgeoning field of artificial intelligence technology.
The chipmaker’s market value increased to $3.336 trillion, or 3.5%, on Wednesday, just days after it surpassed Apple, the maker of the iPhone, to take the second place.
Microsoft’s shares decreased by 0.2%, bringing its stock market worth to $3.325 trillion.
With a 1.3% decline in its stock price, Apple is now worth $3.278 trillion.
While Microsoft’s stock has increased by roughly 19% this year, Nvidia’s stock has increased by roughly 173% as a result of demand for its top-tier chips exceeding supply. The digital behemoths Alphabet, which owns Google, Microsoft, and Meta Platforms are vying with one another to dominate the burgeoning field of artificial intelligence (AI) computing.
The increase on Tuesday increased Nvidia’s market value by nearly $103 billion and sent its shares to a record high.
With more than 80% of the market for AI processors, Nvidia is a clear winner from the rapid advancement of AI technology.The company has routinely surpassed Wall Street’s high expectations for revenue and earnings since its blowout prediction almost a year ago. As businesses race to integrate AI applications, demand for its graphics processors is far exceeding supply.
The demand for Nvidia’s Blackwell AI processors may outpace supply “well into next year,” according to company executives in May.
As of June 7, Nvidia’s highly valued stock is now more appealing to individual investors thanks to a recent 10-for-one stock split.
A stock split may lower the price per share, lowering the purchasing cost for individual investors. Retail investors stand to gain the most from Nvidia’s 10:1 stock split, according to Sam North, a market analyst at eToro, an investment platform.
In just nine months, the company’s market worth increased from $1 trillion to $2 trillion in February, and it took slightly more than three months to reach $3 trillion in June.
The stock’s gains have been overtaken by sharp rises in analysts’ forecasts for Nvidia’s future earnings, which has caused a decline in the stock’s earnings value.
According to LSEG statistics, Nvidia is currently trading at 44 times projected earnings, down from around 84 times expected earnings approximately a year ago.