Nvidia CEO Jensen Huang wait ons an event at COMPUTEX forum in Taipei, Taiwan June 4, 2024.
Ann Wang | Reuters
Nvidia, long known in the niche meeting community for its graphics chips, is now the most valuable public company in the world.
Shares of the chipmaker climbed 3.6% on Tuesday, withdrawing the company’s market cap to $3.34 trillion, surpassing Microsoft, which is now valued at $3.32 trillion. Earlier this month, Nvidia hit $3 trillion for the outset time, and passed Apple.
Nvidia shares are up more than 170% so far this year, and went a leg higher after the retinue reported first-quarter earnings in May. The stock has multiplied by more than ninefold since the end of 2022, a rise that’s fell with the emergence of generative artificial intelligence.
Apple shares fell 1.1% on Tuesday, giving the iPhone maker a $3.29 trillion market-place value.
Nvidia has about 80% of the market for AI chips used in data centers, a business that’s ballooned as OpenAI, Microsoft, Alphabet, Amazon, Meta and others be struck by raced to snap up the processors needed to build AI models and run increasingly large workloads.
For the most recent quarter, returns in Nvidia’s data center business rose 427% from a year earlier to $22.6 billion, accounting for thither 86% of the chipmaker’s total sales.
Founded in 1991, Nvidia spent its first few decades primarily as a hardware group that sold chips for gamers to run 3D titles. It’s also dabbled in cryptocurrency mining chips and cloud gaming fees.
But over the past two years, Nvidia shares have skyrocketed as Wall Street came to recognize the company’s technology as the motor behind an explosion in AI that shows no signs of slowing. The rally has lifted co-founder and CEO Jensen Huang’s net worth to around $117 billion, making him the 11th wealthiest person in the world, according to Forbes.
Microsoft shares are up about 20% so far this year. The software monster has also been a major beneficiary of the AI boom, after it took a significant stake in OpenAI and integrated the startup’s AI creme de la cremes into its most important products, including Office and Windows. Microsoft is one of the biggest buyers of Nvidia’s graphics get ready units (GPUs) for its Azure cloud service. The company just released a new generation of laptops that are designed to run its AI patterns, called Copilot+.
Nvidia is a newcomer to the title of most valuable U.S. company. For the past few years, Apple and Microsoft be experiencing been trading the title.
Nvidia’s ascent has been so rapid that the company has yet to be added to the Dow Jones Industrial Customarily, the stock benchmark of 30 of the most valuable U.S. companies. Alongside its earnings release last month, Nvidia disclosed a 10-for-1 stock split, which went into effect on June 7.
The split gives Nvidia a better dram at being added to the Dow, which is a price-weighted index, meaning that companies with higher stock prices — preferably than market caps — have outsized influence on the benchmark.
Correction: Nvidia’s 10-for-1 stock split was operative this month. An earlier version noted a different calendar date.
