Nvidia became the world’s most valuable company on Tuesday, overtaking tech heavyweight Microsoft, as its chips continue to play a central role in a race to dominate the market for artificial intelligence.
Shares of the chipmaker climbed 3.5% to $135.58, lifting its market capitalization to $3.34tn, just days after overtaking the iPhone maker Apple to become the second most valuable company.
Nvidia’s rise has taken it from a company best known for producing video game chips into a global powerhouse. Its profits have surged amid the tech industry’s immense shift towards artificial intelligence, which has left major companies seeking out Nvidia’s products to serve as a backbone of the technology.
The company’s growth has outpaced other household names in the tech industry including Google and Apple, and has fueled a wave of investment and market speculation.
Nvidia’s latest climb boosted Wall Street to a fresh record high. The S&P 500 rose 0.3% to finish Tuesday at 5,487.03.
The stock has surged about 180% so far this year, compared with a rise of about 19% in Microsoft shares, with demand for its top-of-the-line processors outpacing supply. Tech giants Microsoft, Meta Platforms and Google-owner Alphabet are racing to build out their AI-computing capabilities and dominate the emerging technology.
The surge in shares pushed the stock to a record high, adding more than $103bn to Nvidia’s market capitalization on Tuesday.
Increasing the appeal for its highly valued stock among individual investors, Nvidia recently split its stock 10-for-one, effective 7 June.
“A stock split can reduce the price per share, making it more affordable for individual investors to buy. With Nvidia doing a 10-to-one stock split, retail investors are the real winners here,” said Sam North, market analyst at investment platform eToro.
Nvidia’s chips power many of the AI industry’s marquee tools, including OpenAI’s ChatGPT chatbot. The company’s rising stock price and increased prominence within the industry have made its earnings reports and announcements into destination events for Silicon Valley investors. Increased demand for its chips has also made the price per unit rise to about $30,000 and seen the company’s revenue surge.
after newsletter promotion
As Nvidia’s power within tech has grown, it has also vaulted the 61-year-old CEO, Jensen Huang, into the same rarified position as other industry titans and made him one of the world’s richest men. Over the past year-and-a-half, his net worth has increased a staggering $93bn, making him worth more than $100bn in total.
The company’s market value expanded from $1tn to $2tn in just nine months in February, while taking just over three months to hit $3tn in June.
Reuters contributed reporting
