Nvidia becomes world’s most valuable company as AI rally steams ahead
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The chipmaker's market cap hit US$3.3 trillion on June 18, catapulting it over those of Microsoft and Apple.
PHOTO: REUTERS
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London - Nvidia’s relentless rally has propelled the semiconductor giant’s market capitalisation over its mega-cap tech peers, helping it clinch the title of the world’s most valuable company as the artificial intelligence (AI) wave continues.
The stock rose 3.5 per cent to close at US$135.58 a share on June 18, putting the company’s market value at about US$3.3 trillion (S$4.5 trillion) and catapulting it over those of Microsoft and Apple.
Earlier in June, Nvidia capped Apple by market value for the first time since 2002, and the two went back and forth in rankings in recent days. Last week, Apple also overtook Microsoft to trade in the top spot briefly.
The ranking is yet another reminder that AI is the top focus of many investors. Nvidia is seen as the biggest and earliest beneficiary of the technology as it dominates the market with its highly sought-after chips
The demand for its H100 accelerators is surging and helped drive up the chipmaker’s sales by more than 125 per cent in 2023.
Microsoft, for its part, is also seen as an early AI winner given its investment and partnership with OpenAI, which created ChatGPT. And this week, Apple shares rallied after the iPhone maker finally unveiled its plan for using the technology
“We believe over the next year, the race to US$4 trillion market cap in tech will be front and centre between Nvidia, Apple and Microsoft,” Mr Daniel Ives, an analyst at Wedbush Securities, wrote in a note.
Nvidia’s surging stock price has made co-founder and chief executive Jensen Huang one of the world’s richest people. His net worth has climbed nearly US$75 billion since the beginning of 2024 to US$119 billion, putting him in 12th place on the Bloomberg Billionaires Index. That is the biggest gain among his billionaire peers.
Investors, alongside Mr Huang, argue that Nvidia is more than a chipmaker.
“They’re not just selling chips, they’re selling systems,” Mr Michael Lippert, vice-president and portfolio manager at Baron Capital, said in an interview, pointing to the company’s proprietary software and development ecosystem.
Nvidia’s swift climb to the top has been record-breaking, as it is one of the few companies to have demonstrated significant revenue growth from AI. Shares have risen more than 170 per cent in 2024 through June 18’s close, adding more than US$2 trillion to its market capitalisation.
“Nvidia’s GPU (graphics processing unit) chips are in essence the new gold or oil in the tech sector as more enterprises and consumers quickly head down this path with the Fourth Industrial Revolution well under way,” Mr Ives said. BLOOMBERG
