- Nvidia surpassed Microsoft to become the most valuable public company in the world, with a market cap of $3.33 trillion
- Nvidia’s shares have multiplied by more than nine-fold since the end of 2022, driven by the recent boom in generative artificial intelligence
- Nvidia dominates the market for AI chips used in data centers, with its data center business revenue soaring 427% year-over-year in the latest quarter
Nvidia has overtaken Microsoft to become the world’s most valuable public company. The semiconductor giant hit a market capitalization of $2.3 trillion on Tuesday, surpassing Microsoft’s market cap of $2.2 trillion.
Nvidia’s Remarkable Rise
The Santa Clara, California-based company has seen its shares surge over 170% so far in 2024. Nvidia’s stock price has increased more than ninefold since the end of 2022.
This meteoric rise has coincided with Nvidia’s graphics processing units (GPUs) becoming integral to the explosion in artificial intelligence over the past two years. Nvidia controls around 80% of the market for AI chips used in data centers.
Generative AI Fuels Growth
Nvidia has been the biggest beneficiary of the recent boom in generative AI models like ChatGPT. In the first quarter of 2024, revenue from Nvidia’s data center business jumped 42% year-over-year to $3.26 billion. This accounted for around 86% of the company’s total sales.
Major tech firms like Microsoft, Google, Amazon and Meta have been racing to acquire Nvidia’s GPUs to train and run their AI systems. Nvidia’s technology now powers Azure, Windows, Office and more.
From Gaming Chips to AI Dominance
Founded in 1991, Nvidia originally focused on selling graphics chips to gamers. More recently, it has also produced hardware for cryptocurrency mining and cloud gaming services.
But Wall Street has woken up to Nvidia’s vast potential in the AI space. This has propelled Nvidia’s stock and made CEO Jensen Huang one of the world’s richest people.
Meanwhile, Microsoft’s share price is up around 20% in 2024 as it has also benefited from generative AI. But Nvidia’s surge has eclipsed its growth.
Topping Apple and Microsoft
For years, Apple and Microsoft have vied for the title of most valuable U.S. company. Now Nvidia has swiftly overtaken them both.
Nvidia’s addition to the Dow Jones Industrial Average can’t be far off. The company recently enacted a 10-for-1 stock split to make itself a more viable candidate for the elite 30-stock index.
The AI Chip King
Nvidia’s dominance in AI processors has allowed it to dethrone Microsoft as the most valuable public company. With AI adoption still in its infancy, Nvidia is positioned to continue its incredible growth trajectory.
