Nvidia becomes world’s most valuable company
Nvidia claimed the top position as the world’s most valuable company following a surge in its share price to a record high on Tuesday.
By the close of trading, the stock reached nearly $136, marking a 3.5% increase and surpassing Microsoft in market value. Earlier this month, it had already exceeded Apple.
Nvidia specializes in computer chips essential for artificial intelligence (AI) software, experiencing robust sales and profits due to high demand in recent years.
Anticipation among investors for further earnings growth has propelled its share price upward, although concerns have been raised about its lofty valuation.
With Tuesday’s rally, the company is now valued at $3.34 trillion, almost doubling its value since the beginning of the year.
Just eight years ago, its stock was priced at less than 1% of its current value.
Competition is intense among AI developers such as Microsoft, Google’s Alphabet, Meta, and Apple, all striving to produce leading-edge products.
This rivalry has worked in Nvidia’s favor, as it dominates a significant portion of the AI chip market.
Investors are optimistic about Nvidia’s future prospects, given its consistent outperformance against analyst expectations in terms of sales and profits.
In May, following its latest financial results, Ben Barringer, a technology analyst at Quilter Cheviot, remarked that Nvidia had “once again surpassed a very high benchmark.”
“Demand is showing no signs of switching off either,” he added.
However, a minority are more cautious.
In February, Barclays credit analyst Sandeep Gupta argued that Nvidia’s large market share would be hard to maintain given the increasing number of rivals and questioned how Nvidia’s customers would monetise AI software.
