Nvidia has become the world’s most valuable company, surpassing Microsoft. The chipmaker’s high-end processors are central to the AI technology race, leading to a 3.5% increase in shares, reaching $135.58 and a market capitalization of $3.335 trillion. This move dethroned Apple and Microsoft, with market values of $3.286 trillion and $3.317 trillion, respectively.
Nvidia’s rise symbolizes the growing excitement around AI technology. This surge has driven the S&P 500 and Nasdaq to record highs. However, some investors worry that AI enthusiasm might wane if there’s a slowdown in spending on the technology. Steve Sosnick from Interactive Brokers also commented, “It’s Nvidia’s market; we’re all just trading in it.”
Subsequently, Nvidia has become the most traded company on Wall Street, with daily trading averaging $50 billion. Compared to around $10 billion for Apple, Microsoft, and Tesla it is a huge leap for the company. The chipmaker now accounts for about 16% of all trading in S&P 500 companies. Its stock has nearly tripled this year, outpacing Microsoft’s 19% rise, driven by the high demand for its processors.
Tech giants like Microsoft, Meta Platforms, and Alphabet are competing to enhance their AI capabilities. Nvidia’s AI processors are in high demand and considered far superior to competitors’ offerings. Investors view Nvidia as the biggest winner in the AI boom. Despite the positive attention, Oliver Pursche from Wealthspire Advisors warns, “A small misstep is likely to cause a major correction in the stock, and investors should be careful.”
Nvidia’s stock hit a record high on Tuesday, adding over $110 billion to its market value, equivalent to the entire value of Lockheed Martin. The company’s market value expanded from $1 trillion to $2 trillion in just nine months and reached $3 trillion in three months.
Since its impressive forecast a year ago, Nvidia has consistently exceeded Wall Street’s expectations. The demand for its graphics processors continues to surpass supply, with executives stating that demand for its Blackwell AI chips could exceed supply “well into next year.” Nvidia recently traded at 44 times expected earnings, down from over 84 a year ago. To increase its stock’s appeal, Nvidia split its stock 10-for-one last week.
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