Nvidia CEO Jensen Huang attends an event at the COMPUTEX Forum in Taipei, Taiwan, June 4, 2024.
Ann Wang | Reuters
Nvidialong known in the gaming community for its graphics chips, is now the world's most valuable public company.
The chipmaker's shares rose 3.2% in midday trading Tuesday, raising the company's market value to $3.33 trillion, surpassing… Microsoft. Earlier this month, Nvidia reached $3 trillion market cap for the first time, surpassing… apple.
Nvidia shares are up more than 170% so far this year, and rose after the company reported first-quarter earnings in May. The stock has increased more than nine-fold since the end of 2022, a rise that has coincided with the emergence of generative artificial intelligence.
Nvidia has about 80% of the market for AI chips used in data centers, a company that has ballooned like OpenAI, Microsoft, the alphabet, Amazon, dead Others are racing to snap up the processors needed to build AI models and run increasingly large workloads.
For the most recent quarter, revenue in Nvidia's data center business rose 427% from a year earlier to $22.6 billion, representing about 86% of the chip maker's total sales.
Apple shares fell about 1% during trading on Tuesday, giving it a market value of $3.28 trillion. Microsoft shares fell by less than a percentage point, bringing its market value to $3.32 trillion.
Founded in 1991, Nvidia spent its first few decades primarily as a hardware company selling chips to gamers to run 3D games. It is also involved in cryptocurrency mining chips and cloud gaming subscriptions.
But over the past two years, Nvidia shares have soared as Wall Street recognizes the company's technology as the engine behind an explosion in artificial intelligence that shows no signs of slowing. The rise has brought the net worth of co-founder and CEO Jensen Huang to about $117 billion, making him the 11th richest person in the world, according to Forbes.
Microsoft shares have risen about 20% so far this year. The software giant has also been a major beneficiary of the AI boom, having taken a significant stake in OpenAI and integrating the startup's AI models into its most important products, including Office and Windows. Microsoft is one of the largest buyers of Nvidia graphics processing units (GPUs) for its Azure cloud service. The company has just released a new generation of laptops designed to run its AI models, called Copilot+.
Nvidia is a new entrant to the title of most valuable American company. For the past few years, Apple and Microsoft have been trading the title.
Nvidia's rise has been so rapid that the company has not yet been added to the Dow Jones Industrial Average, the stock index of 30 of America's most valuable companies. Along with its earnings call last month, Nvidia announced a 10-for-1 stock split, which took effect on June 7.
This split gives Nvidia a better chance of being added to the Dow Jones Index, which is a price-weighted index, meaning companies with high stock prices — rather than market capitalization — have a big impact on the index.
Correction: Nvidia's 10-for-1 stock split became effective this month. An earlier version indicated a different calendar date.
