“Nvidia” Becomes World's Most Valuable Company at $3.33 Trillion

Nvidia, long known in the gaming community for its graphics chips, is now the most valuable public company in the world.

The chipmaker's shares rose more than 3% in Tuesday's session, raising the company's market value to $3.33 trillion, surpassing Microsoft. Earlier this month, Nvidia achieved a market value of $3 trillion for the first time, surpassing Apple.

Nvidia shares have risen more than 170% so far this year, and rose after the company reported first-quarter earnings in May. The stock has increased more than 9-fold since the end of 2022, a rise that has coincided with the emergence of artificial intelligence (AI).

Nvidia owns about 80% of the market for artificial intelligence chips used in data centers, a company that has ballooned as OpenAI, Microsoft, Alphabet, Amazon, Meta, and others race to snap up the processors needed to build artificial intelligence models and run increasingly large workloads, according to what CNBC reported.

For the latest quarter, revenue in Nvidia's data center business rose 427% from a year earlier to $22.6 billion, representing about 86% of the company'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, giving it a market value of $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 skyrocketed 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 

Microsoft shares have risen about 20% so far this year. The software giant has also been a major beneficiary of the AI ​​boom, having acquired 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 the new entrant to the title of the 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, a benchmark of 30 stocks that has historically included the most valuable American companies. Along with its earnings announcement last month, Nvidia announced a 10-for-1 stock split, which took effect on January 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.