Nvidia Surpasses $3 Trillion Market Value, Overtakes Apple as Second Most Valuable Public Company

Thu, Jun 6, 2024 10:37 AM on International, Stock Market, Exclusive,

Nvidia's market value has soared past $3 trillion (£2.3 trillion), propelling the chipmaker ahead of Apple to become the second most valuable publicly listed company globally. The firm’s share price surged over 5% on Wednesday, reaching more than $1,224. This continued a remarkable ascent that began last year, driven by expectations that Nvidia is poised to capitalize significantly on the burgeoning investments in artificial intelligence (AI).

Nvidia's market capitalization now trails only Microsoft, another pivotal player in the tech industry due to its investments in ChatGPT-maker OpenAI. As recently as February, Nvidia was valued at "just" $2 trillion. The company ignited a fresh wave of share purchases following its announcement last month of a stock split, which will increase the number of shares by a factor of 10 and reduce their value accordingly. This change, set to take effect on Friday, is intended to make shares more accessible to individual investors and is anticipated to further boost demand for the stock.

Founded in 1993, Nvidia initially gained recognition for producing graphics processing units (GPUs) for computer games. However, even before the AI revolution, the company began integrating features into its chips that facilitate machine learning, a strategy that has significantly expanded its market share. Nvidia is now regarded as a key indicator of the rapid adoption of AI-powered technology across the business sector, a shift that CEO Jensen Huang has described as the onset of the "next industrial revolution."

The company has experienced explosive growth, reporting sales of $26 billion for the three months ending April 28, more than triple the amount from the same period in 2023 and an 18% increase from the previous quarter. Optimism surrounding AI is one of the driving forces behind a broader market rally over the past year, which saw the S&P 500 and the Nasdaq in the United States reach new record highs on Wednesday.

Apple, which had seen sales growth stagnate earlier this year, appeared to be losing ground. However, its shares have recently been buoyed by anticipation of how it plans to integrate AI into its strategy. Apple's shares rose 0.7%, bringing its market capitalization to approximately $3 trillion. Market capitalization is generally calculated by multiplying a company’s total number of shares by its current share price.