Chipmaker Nvidia became the new king of the stock market when its market capitalisation roared past that of Microsoft and Apple’s to become the world’s most valuable public company.
Nvidia became only the 12th company to achieve the honour ever since S&P 500 index was created in 1926, joining a select club of companies that includes the likes of General Motors, Exxon Mobil, IBM, Cisco, DuPont, apart from Apple and Microsoft.
On Tuesday, the non-stop demand for its graphics processing units (GPUs), which have become the life of artificial intelligence, led Nvidia prices higher by 3.6 percent to $136.33, taking its value to $3.34 trillion. It closed the day lower at $135.58, implying a market cap of $3.335 trillion. That was above Microsoft ($3.317 trillion) and Apple ($3.286 trillion) – the two stocks that have been the darling of investors over the past several years.
The mind-boggling rise has seen Nvidia’s valuation grow nearly seven times from just above $400 billion two years ago. In just the last 12 months, it has gone from $1 trillion (13 June, 2023) to more than $3 trillion. The jump from $2 trillion (1 March, 2024) to $3 trillion (5 June, 2024) took just 96 days.
In comparison, Apple crossed $1 trillion in August 2018 and became the first $3 trillion company in June 2023. Microsoft also took nearly five years to climb from $1 trillion to $3 trillion.
Shares of Nvidia are up more than 215 percent over the last 12 months and more than 3,400 percent over the last five years. It’s up 175 percent for 2024 alone, while Microsoft, one of its biggest buyers, is up around 19 percent since 1 January this year.
AI powers Nvidia’s surge
AI has been Nvidia’s fuel for growth, but it has also dictated the valuations of other companies. Microsoft became the most valuable company in the world this January because of its AI features and collaboration with OpenAI, and Apple went past the $3 trillion mark within days of announcing its own Apple Intelligence at the WWDC earlier this month.
Led by its charismatic founder and chief executive Jensen Huang, who has been steadfast in his belief that AI is going to be the next big area of growth and that GPUs would be the most essential tool for those complex computations, Nvidia now owns nearly 80 percent market share for the chips used in artificial intelligence. Its sales tripled last quarter compared to a year ago, and the company expects it to double in the current quarter.
Earlier this month in Taiwan, Huang announced that the company will release a high-powered version of its Blackwell chip – called the Blackwell Ultra – next year, followed by a new AI chip platform, Rubin, in 2026. The company will debut an Ultra version of Rubin in 2027.
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