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NVIDIA becomes world’s most valuable company

Written by Wed 19 Jun 2024

Image Credit: Reuters

On Tuesday, NVIDIA became the world’s most valuable company, surpassing Microsoft as chips play a central role in the competition to lead the artificial intelligence (AI) market.

Shares in the chipmaker rose 3.5% to £106.50 ($135.58), elevating its market capitalisation to £2.619 trillion ($3.335 trillion). This occurred days NVIDIA overtook Apple to become the second most valuable company.

Microsoft’s stock market value was £2.605 trillion ($3.317 trillion) after a 0.45% dip, while Apple’s stock fell over 1%, leaving its value at £2.581 trillion ($3.286 trillion).

NVIDIA has also become the most traded company on Wall Street, with an average daily turnover of £39.2 billion ($50 billion), compared to about £7.8 billion ($10 billion) each for Apple, Microsoft, and Tesla, according to LSEG data. The chipmaker now represents around 16% of all trading in S&P 500 companies.

NVIDIA Outpaces Tech Giants

NVIDIA’s stock has nearly tripled this year, surpassing Microsoft’s 19% rise, due to high demand for its leading processors. The stock is up over 170% this year and has increased about 1,100% since its October 2022 low. 

Meanwhile, tech giants like Microsoft, Meta Platforms, and Google-owner Alphabet are racing to enhance their AI capabilities and integrate the technology into their products and services.

NVIDIA’s market value increased from £785 million ($1 trillion) to £1.5 million ($2 trillion) in nine months by February, and reached £2.3 trillion ($3 trillion) in just over three months by June.

In comparison, Microsoft took 945 days and Apple 1,044 days to grow from £1.5 million ($2 trillion) to £2.3 trillion ($3 trillion), according to Bespoke Investment Group.

In May, NVIDIA executives noted demand for its Blackwell AI chips could exceed supply ‘well into next year’.

NVIDIA’s revenue is expected to double to £94.2 billion ($120 billion) this fiscal year and increase another 33% to £125 billion ($160 billion) by fiscal 2026, according to LSEG data. However, some investors worry that the enthusiasm for AI could wane if spending on the technology slows down.

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Written by Wed 19 Jun 2024

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