Nvidia has overtaken Microsoft and Apple to become the world’s most valuable public company as investors continue to bet heavily on the chip maker that is powering the artificial intelligence (AI) market.
On Tuesday, Nvidia shares climbed 3.5 per cent to $135.58, taking its market valuation to $3.35 trillion (£2.63 trillion), toppling both Microsoft and Apple from their prime positions on the S&P 500.
The stock has soared nearly 210 per cent over the past year and 182 per cent in 2023 and has so far been the chief beneficiary of the booming demand for chips that support generative AI models like OpenAI’s ChatGPT.
This demand has driven a significant portion of the nearly 16 per cent year-to-date increase in the S&P 500 index, which has risen to multiple record highs this year.
New York’s Nasdaq exchange, where Nvidia is listed, has also surged 21 per cent year to date to a record high.
In May 2023, Nvidia hit a $1 trillion valuation, in February 2024 it reached a $2 trillion valuation and in June its valuation surpassed $3.3t.
“This can be an exceptionally volatile stock, and much more volatile than the overall market,” said Kathleen Brooks, research director at XTB. “However, the volatility in the past 12 months has mostly been to the upside.
“While momentum is great until it is not, it is also worth noting the financial fundamentals at Nvidia could also drive its stock price higher.
“The company has a valuation of $3.3 trillion and a debt load of $11bn, which means there is ample room for chunky shareholder returns in the future, which may also attract more people to the stock,” Brooks explained.
Founded in 1993 by Jensen Huang and two others, Nvidia originally built graphics cards for video gamers.
Today, it dominates the global market for AI chips, counting major tech giants such as Microsoft, Meta and Amazon among its customers.
The company’s data centre chips and graphics processing units (GPUs) are highly sought after as businesses look to develop their own AI models and use the technology to increase productivity.