Artificial Intelligence Surge Pushes U.S. Chip Maker to $3.3 Trillion Market Cap
Nvidia’s unstoppable ascent in the stock market has crowned the semiconductor giant as the world’s most valuable company, surpassing tech behemoths Microsoft and Apple. The company’s market capitalization soared to $3.3 trillion on Tuesday, driven by the ongoing artificial intelligence boom.
The stock price rose 3.5% to close at $135.58 per share, positioning Nvidia ahead of its major competitors. This milestone marks a significant achievement as Nvidia edged past Microsoft and Apple, both of which have been vying for the top spot.
Earlier this month, Nvidia briefly surpassed Apple’s market value for the first time since 2002, with both companies alternating in the rankings recently. Last week, Apple also briefly overtook Microsoft to claim the leading position.
AI’s Central Role in Nvidia’s Rise
The shift underscores the pivotal role AI plays in investors’ strategies. Nvidia is seen as the primary beneficiary of the AI revolution, thanks to its dominance in producing highly coveted chips that power data centers handling complex AI tasks. The company’s H100 accelerators have seen a surge in demand, driving a sales increase of over 125% last year.
Microsoft is also recognized as an early AI leader due to its investment in and collaboration with OpenAI, the creator of ChatGPT. Meanwhile, Apple has recently gained investor favor by unveiling its AI strategy, boosting its share price.
Future Market Cap Race
Analyst Daniel Ives of Wedbush Securities predicts a fierce race to the $4 trillion market cap between Nvidia, Apple, and Microsoft over the next year. Nvidia’s dramatic rise has also significantly boosted the wealth of its co-founder and CEO, Jensen Huang, whose net worth has jumped by nearly $75 billion this year, reaching $119 billion and placing him 12th on the Bloomberg Billionaires Index.
Beyond Chips: Nvidia’s Comprehensive Ecosystem
Investors like Michael Lippert, vice president and portfolio manager at Baron Capital, emphasize that Nvidia offers more than just chips. The company’s proprietary software and development ecosystem are integral to its market leadership.
Nvidia’s rapid ascent has been historic, with its stock price rising over 170% in 2024, adding more than $2 trillion to its market capitalization. “Nvidia’s GPU chips are essentially the new gold or oil in the tech sector,” said Ives, highlighting the company’s role in the ongoing Fourth Industrial Revolution.
This remarkable performance positions Nvidia as a central figure in the tech industry’s future, underscoring the transformative impact of AI on global markets.
