Nvidia vaults past Apple and Microsoft to become world’s most valuable company

 


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

Shares of the chipmaker climbed 3.2% in mid-day trading on Tuesday, lifting the company’s market cap to $3.33 trillion, surpassing Microsoft. Earlier this month, Nvidia hit a $3 trillion market cap for the first time and passed Apple


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Nvidia has about 80% of the market for AI chips used in data centers, a business that’s ballooned as OpenAI, Microsoft, AlphabetAmazonMeta, and others have raced to snap up the processors needed to build AI models and run increasingly large workloads.



For the most recent quarter, revenue in Nvidia’s data center business rose 427% from a year earlier to $22.6 billion, accounting for about 86% of the company’s total sales.

Apple shares were down about 1% during trading on Tuesday, giving it a $3.28 trillion market value. Microsoft shares slid less than a percentage point, giving it a market cap of $3.32 trillion.

Founded in 1991, Nvidia spent its first few decades primarily as a hardware company that sold chips for gamers to run 3D titles. It’s also dabbled in cryptocurrency mining chips and cloud gaming subscriptions.

But over the past two years, Nvidia shares have skyrocketed as Wall Street came to recognize the company’s technology as the engine behind an explosion in AI that shows no signs of slowing. The rally has lifted co-founder and CEO Jensen Huang’s net worth to about $117 billion, making him the 11th wealthiest person in the world, according to Forbes.


Microsoft shares are up about 20% so far this year. The software giant has also been a major beneficiary of the AI boom, after it took a significant stake in OpenAI and integrated the startup’s AI models into its most important products, including Office and Windows. Microsoft is one of the biggest buyers of Nvidia’s graphics processing units (GPUs) for its Azure cloud service. The company just released a new generation of laptops that are designed to run its AI models, called Copilot+.



Nvidia is a newcomer to the title of most valuable U.S. company. For the past few years, Apple and Microsoft have been trading the title.

Nvidia’s ascent has been so rapid that the company has yet to be added to the Dow Jones Industrial Average, a benchmark of 30 stocks that’s historically included the most valuable U.S. companies. Alongside its earnings release last month, Nvidia announced a 10-for-1 stock split, which went into effect on Jan. 7.

The split gives Nvidia a better shot at being added to the Dow, which is a price-weighted index, meaning that companies with higher stock prices — rather than market caps — have outsized influence on the benchmark.

Nvidia’s startling ascent in the stock market reached another milestone Tuesday as the chipmaker rose to become the most valuable company in the S&P 500. Investors now say the company is worth over $3.3 trillion.

Nvidia has seen soaring demand for its semiconductors, which are used to power artificial intelligence applications. Revenue more than tripled in the latest quarter from the same period a year earlier.

The company’s journey to be one of the most prominent players in AI has produced some eye-popping numbers. Here’s a look:

$3.334 Trillion

Nvidia’s total market value as of the close Tuesday. It edged past Microsoft ($3.317 trillion). Apple is the third most-valuable company ($3.286 trillion). One year ago, the company had just crossed the $1 trillion threshold.

$113 billion

The one-day increase in Nvidia’s market value on Tuesday.

$135.58

Nvidia’s closing stock price Tuesday. Two weeks ago the stock traded at more than $1,200, but the company completed a 10-for-1 stock split after trading closed on June 7. That gave each investor nine additional shares for every share they already owned. Companies with a high stock price often conduct stock splits to make the stock more affordable for investors.

$119.9 billion

Analysts’ estimate for Nvidia’s revenue for the fiscal year that ends in January 2025. That would be about double its revenue for fiscal 2024 and more than four times its receipts the year before that.

53.4%

Nvidia’s estimated net margin, or the percentage of revenue that gets turned into profit. Looked at another way, about 53 cents of every $1 in revenue Nvidia took in last year went to its bottom line. By comparison, Apple’s net margin was 26.3% in its most recent quarter and Microsoft’s was 36.4%. Both those companies have significantly higher revenue than Nvidia, however.

32%

How much of the S&P 500’s gain for the year through May came only from Nvidia.

11

The number of companies other than Nvidia that were once the most valuable in the S&P 500, going back to 1926, according to S&P Dow Jones Indices. Among them: AT&T, IBM and Walmart.

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