Nvidia Overtakes Microsoft to Become the World's Most Valuable Listed Company

TMTPOST--Nvidia, renowned for its high-performance graphics chips, has now become the world's most valuable listed company.

On Tuesday, Nvidia's shares surged by 3.6%, elevating its market capitalization to an unprecedented $3.34 trillion, surpassing Microsoft, which is now valued at $3.32 trillion. Earlier in the month, Nvidia's market cap reached $3 trillion for the first time, overtaking Apple.

This meteoric rise in Nvidia's stock, which has increased by over 170% year-to-date, gained a further boost following the company's robust first-quarter earnings report in May. The stock price has soared by more than ninefold since the end of 2022, a period that has coincided with the rapid development and integration of generative artificial intelligence technologies.

Nvidia has not only become the first chip company to surpass $3 trillion in market value but also marks the first $3 trillion company founded by an ethnic Chinese. It is now the seventh company to exceed $1 trillion, the third American company to surpass $3 trillion in market cap, and the world's largest AI technology firm, showing its rapid ascent and historical significance.

“We believe over the next year the race to $4 Trillion Market Cap in Tech will be front and center between Nvidia, Apple, and Microsoft,” Daniel Ives, analyst at Wedbush Securities, wrote in a note.

“Nvidia’s GPU chips are in essence the new gold or oil in the tech sector as more enterprises and consumers quickly head down this path with the 4th Industrial Revolution well underway,” Ives added.

Rosenblatt Securities analyst Hans Mosesmann even raised Nvidia's target price from $140 to a Wall Street high of $200 on Tuesday, potentially pushing its market value to nearly $5 trillion in the next year.

“We anticipate this software aspect will significantly increase in the next decade in terms of overall sales mix, with an upward bias to valuation due to sustainability,” Mosesmann wrote in a note to clients.

“They’re not just selling chips, they’re selling systems,” Michael Lippert, vice president and portfolio manager at the Baron Capital said, pointing to the company’s proprietary software and development ecosystem.

Nvidia’s stock is one of the most loved stocks by sell-side analysts, with 64 buys, seven holds and one sell rating, among analysts tracked by Bloomberg.

Founded in 1993, Nvidia pioneered GPU graphics computing in 1999, revolutionizing PC gaming and catalyzing modern AI accelerated computing. Today, Nvidia spans CPUs, GPUs, DPUs, and AI software, dominating the GPU and accelerated computing sector with over 90% global market share.

As Nvidia's market value surges, CEO Jensen Huang's personal wealth has also risen significantly. Ranked 12th on Bloomberg's global billionaire list with a net worth of $115 billion, Huang's leadership shows Nvidia's influence and market dominance in the AI and semiconductor sectors.

Moreover, Nvidia executives, including Huang, have capitalized on the company's success, with substantial stock sales totaling over $700 million in the first half of this year. This financial maneuvering reflects robust confidence in Nvidia's future growth and market leadership.