In a surprising turn of events, Nvidia has surpassed Microsoft as the world’s most valuable public company. This comes just weeks after Nvidia overtook Apple for the second place spot.
During trading on Tuesday, Nvidia’s shares rose by over 3%, solidifying its position at the top. The chipmaker’s stock has seen a remarkable increase of over 170% this year, largely due to its strong presence in the artificial intelligence (AI) market with 80% of the processor market share.
Nvidia’s market value now stands at an impressive $3.326 trillion, a significant increase from its previous milestone of $2 trillion in February. This remarkable rise is a testament to the continued dominance of the tech sector, which has been largely led by Apple since the launch of the iPhone in 2007.
Microsoft, which had only recently taken the top spot from Apple, saw a surge in its shares earlier this year following its investment in ChatGPT-maker OpenAI. This move was seen as advantageous for Microsoft as it solidified its position in generative AI technology.
However, analysts credit the recent surge in demand for Nvidia’s shares to the company’s stock split earlier this month. This split resulted in more shares being available and made them more appealing to individual investors. Prior to the split on June 7th, Nvidia’s shares were priced at over $1,000 each.
In comparison, Microsoft’s shares have only seen a modest increase of 19% this year. This performance, while satisfactory in its own right, pales in comparison to Nvidia’s remarkable growth.
The demand for Nvidia’s processors is currently exceeding supply as tech giants such as Microsoft, Meta Platforms, and Google’s parent company race to develop AI computing capabilities. This demand has boosted Nvidia’s market value significantly, with market watchers estimating that the rise in stock value on Tuesday alone added over $100 billion.
Sam North, an analyst at investment platform eToro, attributes the recent surge in Nvidia’s shares to the anticipation and execution of the stock split. “A stock split can reduce the price per share, making it more affordable for individual investors to buy,” he explains. “With Nvidia doing a 10:1 stock split, retail investors are the real winners here.”
