Nvidia, the startup at the heart of the artificial intelligence boom, has ascended to become the world’s most valuable company, surpassing Microsoft. The chipmaker’s market capitalization soared to $3.335 trillion on Tuesday, following a 3.5 percent rise in its share price to $135.58. This milestone was achieved just days after the Santa Clara, California-based company surpassed Apple to claim the position of the world’s second most valuable company.
In contrast, shares of Microsoft and Apple, now holding the second and third spots respectively, experienced declines. Microsoft’s shares fell by 0.45 percent, while Apple’s dropped by 1.1 percent.
Nvidia’s remarkable rally, which has driven the S&P 500 and Nasdaq indexes to record highs, marks a spectacular winning streak for the company. Its graphics processing units (GPUs) are critical to the development of AI, propelling its stock price up by nearly 182 percent this year alone, following a tripling of its value in 2023.
The company’s success is largely driven by strong demand for its chips from tech giants like Microsoft, Meta, and Google. Nvidia now controls approximately 80 percent of the market for AI chips used in data centers essential for running AI models such as OpenAI’s ChatGPT. Since its stock market debut in 1999, Nvidia shares have skyrocketed by 591,078 percent. An investment of $10,000 in the company in 1999 would be worth $59,107,800 today, according to the Kobeissi Letter newsletter on capital markets.
Initially focusing on producing chips for computer games, Nvidia’s chief executive Jensen Huang redirected the company during the 2000s to invest heavily in developing GPUs for a range of applications beyond gaming. This strategic pivot positioned Nvidia to capitalize on the rise of AI, contributing significantly to its extraordinary growth.
Nvidia’s unprecedented rise has also propelled Huang into the ranks of the world’s richest individuals, with an estimated net worth exceeding $117 billion, according to Forbes.
