Nvidia (NVDA) has dethroned Microsoft (MSFT) to become the world’s most valuable company by market capitalization. This surge is fueled by Nvidia’s dominance in the market for artificial intelligence (AI) hardware. Nvidia’s stock price climbed 3.5% to $135.58, pushing its market cap to a whopping $3.335 trillion. This surpassed Microsoft’s $3.317 trillion market cap and Apple’s $3.286 trillion valuation. Nvidia’s stock has nearly tripled in value this year, reflecting the high demand for its AI processors.
The rapid growth of AI in the past few years has fueled the company’s growth
This surge is a reflection of widespread investor optimism about the future of artificial intelligence technology. However, some analysts warn that this optimism could cool down if there are signs of a slowdown in spending on AI technology.
Nvidia’s dominance in the AI hardware market is a key factor in its success. Their processors are considered superior to competitors’ offerings, leading to a situation where demand heavily outpaces supply. This has made Nvidia the most traded company on Wall Street, with daily turnover averaging a staggering $50 billion.
Nvidia’s stock price recently hit a record high, adding over $110 billion to its market cap. This increase is equivalent to the entire value of Lockheed Martin. The company’s market value has grown explosively, expanding from $1 trillion to $2 trillion in just nine months, and reaching $3 trillion in just over three months.
Nvidia has consistently exceeded Wall Street’s expectations for revenue and profit, driven by the surging demand for its graphics processors as companies race to incorporate AI applications. The company has also recently split its stock 10-for-one, potentially making it more attractive to individual investors. However, despite the stock’s gains, the company’s earnings valuation has actually fallen due to increasing analyst expectations for future earnings.
(Via)
