Source: Bianniushi
On June 19, according to foreign media reports, Nvidia's (NVDA) market value officially surpassed Microsoft's (MSFT) on Tuesday to become the world's most valuable company, just two weeks ago, it took the second place from Apple (AAPL).
Nvidia's stock price rose about 3.5% today, breaking through $135 per share, giving the chipmaker a market value of more than $3.33 trillion. Microsoft fell 0.4% on Tuesday, with a market value of nearly $3.32 trillion.
Nvidia shares are up more than 215% in the past 12 months and more than 3,400% in the past five years. So far this year, Nvidia shares are up 175%; Microsoft shares are up nearly 19% in 2024.
On June 13, 2023, Nvidia’s market value exceeded $1 trillion for the first time.
On March 1, 2024, the stock surpassed $2 trillion and quickly crossed the $3 trillion mark on June 5.
The company's growth from $1 trillion to $3 trillion in market value is the fastest on record.
Nvidia's rise has made it the largest weighted stock in the S&P 500, and the chipmaker played a key role in the benchmark index's run to an all-time high in 2024.
As of May, the S&P 500 and Nvidia's stock price movements were almost perfectly correlated, meaning that if Nvidia's stock price went up, the S&P 500 would also go up.
As of Monday, Nvidia's share price gains alone accounted for a third of the S&P 500's year-to-date gains, according to Citigroup's equity research team.
Nvidia completed a 10-for-1 split on June 10.
The company’s rise comes amid an explosion in generative AI sparked by OpenAI’s launch of its ChatGPT platform in late 2022.
Nvidia's chips, improved graphics cards and CUDA software platform are designed to train and run artificial intelligence programs, giving it a strategic advantage that experts say will take years for rivals Advanced Micro Devices (AMD) and Intel (INTC) to overcome.
Nvidia is the technology industry's preferred supplier of AI chips and integrated software.
Tech giants including Amazon (AMZN), Google (GOOG), Meta (META), Microsoft, Tesla (TSLA), and others use its hardware to power everything from cloud-based AI products for customers to their own AI models and services.
During a June 2 keynote at the Computex conference in Taiwan, CEO Jensen Huang announced that the company will release a high-performance version of the Blackwell chip, called Blackwell Ultra, in 2025, followed by a new AI chip platform, Rubin, in 2026. The company will launch an Ultra version of Rubin in 2027.
In the first quarter, Nvidia reported adjusted earnings per share of $6.12 and revenue of $26 billion, up 461% and 262% from the same period last year, respectively.
Nvidia's data center revenue in its most recent quarter grew 427% year over year to $22.6 billion, accounting for 86% of the company's total revenue for the quarter.
Nvidia's most important business previously was its gaming division, which had revenue of $2.6 billion.
But AMD and Intel are advancing their own AI chips with the goal of surpassing Nvidia. AMD recently announced that its MI325X and MI350 will be available in 2024 and 2025, respectively, and said its next-generation MI400 AI accelerator platform will be available in 2026.
Meanwhile, Intel says its Gaudi 2 and Gaudi 3 AI accelerators will cost less than competing chips, and with companies investing billions of dollars in AI chips, any price savings are sure to be welcomed.
Nvidia also faces growing competition from its own customers as Amazon, Google and Microsoft all try to wean themselves off reliance on the company’s chips and save on capital spending at the same time.
Founded in 1991, Nvidia spent its first few decades primarily as a hardware company, selling chips to gamers to run 3D games. The company has also dabbled in cryptocurrency mining chips and cloud gaming subscriptions.
But over the past two years, Nvidia's stock has soared as Wall Street has come to realize that its technology is the engine behind the explosive growth in artificial intelligence, and that momentum shows no signs of slowing.
The surge boosted co-founder and CEO Jensen Huang's net worth 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 boom in artificial intelligence, with a large 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, and the company just released a new generation of laptops designed specifically to run its artificial intelligence models, called Copilot+.
Nvidia is making the list of the most valuable companies in the U.S. for the first time. Apple and Microsoft have been competing for the title for the past few years.
Nvidia’s rise has been so rapid that the company has yet to be included in the Dow Jones Industrial Average, a stock benchmark of the 30 most valuable companies in the U.S. Last month, Nvidia announced a 10-for-1 stock split alongside its earnings report, which took effect June 7.
The split gives Nvidia a better chance of being included in the Dow Jones Industrial Average, which is a price-weighted index, meaning companies with higher stock prices, rather than larger market capitalizations, have greater influence on the benchmark.
