Chip giant’s market capitalisation hits $3.335 trillion as stock prices
continues its stellar rise.
Nvidia
Nvidia is the world’s most valuable company [Jeff Chiu/AP]
Nvidia, the startup at the centre of the artificial intelligence boom, has become
the world’s most valuable company, knocking Microsoft off the top spot.
Nvidia’s market capitalisation hit $3.335 trillion on Tuesday as shares of the chipmaker
rose by 3.5 percent to $135.58.
The feat comes just days after the Santa Clara California-based company eclipsed
Apple to become the world’s second most valuable company.
Shares of Microsoft and Apple, holders of the no 2 and no 3 spots, fell by 0.45 percent
and 1.1 percent, respectively.
Nvidia’s rally, which has lifted the S&P 500 and Nasdaq indexes to record highs, continues
a speculator winning streak for the company, whose graphics processing
units (GPUs) are integral to the development of AI.
Buoyed by voracious demand for its chips from tech giants such as Microsoft, Meta
and Google, the company’s stock price has surged nearly 182 percent this year alone,
after more than tripling in 2023.
Nvidia controls about 80 percent of the market for AI chips used in data centres
needed to run AI models such as OpenAI’s ChatGPT.
Since its stock market debut in 1999, Nvidia shares have skyrocketed 591,078 percent.
An investor who put $10,000 into the company in 1999 would hold $59,107,800
worth of stock today, according to the Kobeissi Letter newsletter on capital markets.
Nvidia spent its first few decades focusing mainly on producing chips for
computer games.
But during the 2000s, chief executive Jensen Huang directed the company to invest
heavily in developing GPUs for use in applications besides gaming, setting it up to
capitalise on the emergence of AI.
The company’s stunning rise has turned Huang into one of the world’s richest men,
with an estimated net worth of more than $117bn, according to Forbes.
Chipmaker firm Nvidia’s 591,078% rally to most valuable stock came in waves
On Tuesday, that run culminated in Nvidia unseating Microsoft Corp. as the world’s most valuable company with a market
capitalisation of $3.34 trillion
The Company’s Key To Early Success: Getting Its Technology In Video-Game Consoles Like Microsoft’s Xbox And Sony’s
PlayStation | Photo: Bloomberg
By Jeran Wittenstein and Carmen Reinicke
The year was 1999. Steve Jobs had recently returned to lead Apple. Intel was the dominant force
in semiconductors. And a little-known chipmaker named Nvidia made its debut on the Nasdaq
stock exchange.
It took less than three years for Corp. to ascend into the S&P 500 — replacing the
disgraced oil-trading conglomerate Enron, no less.
But even then, few people would have bet that the company would go on to become the best
performing stock of the last quarter-century, posting a total return of 591,078 per cent since its
initial public offering, including reinvested dividends. It’s a difficult number to comprehend and
a testament, in part, to the financial mania brewing around artificial intelligence and how
investors have come to see — which makes the cutting-edge chips powering the
technology — as the single-biggest winner of the boom.
On Tuesday, that run culminated in Nvidia unseating Microsoft Corp. as the world’s most
valuable company with a market capitalisation of $3.34 trillion. More than $2 trillion of
that value has been added this year.
The company’s rise was by no means assured — and neither is its staying power at the
top of the S&P 500. Long-time investors in Nvidia have had to stomach three annual collapses of 50 per
cent or more in the stock. Sustaining the current rally will require customers to keep spending
billions of dollars a quarter on AI equipment, whose returns on investment are so far relatively
small.