Nvidia overtakes Microsoft to becomes world’s most valuable company

Nvidia

Nvidia on Tuesday became the world’s most valuable company and dethroned tech heavyweight Microsoft.

Nvidia’s chips continue to play a central role in a race to dominate the market for artificial intelligence.

Shares of Nvidia gained 5.2 percent on Wednesday to close at $1,224.40, lifting the company’s market capitalisation to $3.012 trillion.

Microsoft, the world’s most valuable company, rose 1.91 percent, while Apple gained 0.78 percent.

Nvidia’s rally continues an extraordinary streak of gains for the California-based firm, whose graphics processing units have fuelled a boom in artificial intelligence (AI).

The company’s revenues have soared more than 260 percent over the past year as tech giants such as Microsoft, Meta, Google and Amazon race to roll out AI.

Shares of Nvidia have more than doubled in value so far this year after more than tripling in value in 2023.

Nvidia last month announced a 10-for-1 stock split “to make stock ownership more accessible to employees and investors”.

The split, which goes into effect on Friday, is likely to make the company’s shares even more attractive to small-time investors.

Apple, the first company to see its market capitalisation breach the $1 trillion and $2 trillion marks, is grappling with tepid demand for its iPhones in China and perceptions that it is falling behind in the race to adopt AI.

Apple’s stock price has risen only about 5 percent so far this year, well behind the broad-based S&P 500 and tech-heavy Nasdaq indexes.

Founded in 1991, Nvidia spent its first few decades primarily as a hardware company that sold chips for gamers to run 3D titles. It’s also dabbled in cryptocurrency mining chips and cloud gaming subscriptions.

But over the past two years, Nvidia shares have skyrocketed as Wall Street came to recognize the company’s technology as the engine 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 about $117 billion, making him the 11th wealthiest person in the world, according to Forbes.