NVIDIAhas long been known in the niche gaming community for its graphics chips and is now the world’s most valuable publicly traded company.
The company’s shares were up 3.2% in midday trading on Tuesday, giving it a market capitalization of $3.33 trillion. MicrosoftEarlier this month, NVIDIA hit a market cap of $3 trillion for the first time. apple.
Nvidia shares have risen more than 170% so far this year, rising further after the company reported its first-quarter earnings in May. The company’s shares have risen more than ninefold since the end of 2022, a rally that coincides with the emergence of generative artificial intelligence.
Nvidia holds about 80% of the market for AI chips used in data centers, a business that is being split between OpenAI, Microsoft and alphabet, Amazon, Meta And other companies are competing for the processors they need to build AI models and run increasingly large workloads.
In the most recent quarter, revenue from Nvidia’s data center business rose 427% year-over-year to $22.6 billion, accounting for about 86% of the chipmaker’s total sales.
Apple shares fell about 1% during trading on Tuesday, giving it a market capitalization of $3.28 trillion. Microsoft shares fell less than 1% to a market capitalization of $3.32 trillion.
Founded in 1991, Nvidia spent its first few decades primarily as a hardware company selling chips that gamers used to run 3D titles, but also dabbled in cryptocurrency mining chips and cloud gaming subscriptions.
But over the past two years, NVIDIA’s stock price has soared as Wall Street has come to recognize the company’s technology as a driving force behind the explosive growth of AI, which shows no signs of slowing. The rise has given co-founder and CEO Jensen Huang a net worth of roughly $117 billion, making him the 11th-richest person in the world. Forbes.
Microsoft shares are up about 20% so far this year. The software giant has been a big beneficiary of the AI boom, having invested heavily in OpenAI and integrated the startup’s AI models into its flagship products, including Office and Windows. Microsoft is one of the largest buyers of NVIDIA’s graphics processing units (GPUs) for its Azure cloud service. The company has just released a new generation of laptops called Copilot+ that are designed to run AI models.
Nvidia is a newcomer to the title of most valuable U.S. company. For the past few years, Apple and Microsoft have been vying for the title.
Nvidia’s growth has been so rapid that the company isn’t yet included in the Dow Jones Industrial Average, a benchmark for the 30 largest U.S. companies by market capitalization. Alongside its earnings report last month, Nvidia announced a 10-for-1 stock split, effective June 7.
The stock split increases Nvidia’s chances of being included in the Dow Jones Industrial Average, a price-weighted index that means companies with higher stock prices than their market capitalizations have greater influence on the benchmark.
Correction: Nvidia’s 1-for-10 stock split took effect this month. An earlier version listed a different calendar date.