NVIDIA dethrones Microsoft as the world’s leading tech giant

NVIDIA dethrones Microsoft as the world’s leading tech giant is profiled by BTW Media because published evidence links it to internet infrastructure, governance, operational dependencies, or market visibility.

• On Tuesday, NVIDIA’s shares rose by 3.7% to $135.87, pushing its market capitalisation to $3.341 trillion, surpassing Microsoft’s $3.314 trillion as its shares fell by 0.5%.
• NVIDIA’s rise to the top is not just a testament to its success but also a reflection of the broader market’s faith in AI’s potential.

OUR TAKE
In the high-octane world of tech stocks, NVIDIA has emerged as the new heavyweight champion, surpassing Microsoft and Apple. This meteoric rise underscores not just NVIDIA’s prowess in AI technology but also Wall Street’s feverish optimism for the AI revolution. Yet, amidst the frenzy, skeptics warn of AI’s uncertain future, hinting at a volatile path ahead. As NVIDIA reshapes markets, its next move could redefine the tech landscape yet again.
–Miurio, Huang

NVIDIA has become the world’s most valuable company, surpassing tech giant Microsoft as its high-end processors are pivotal in the race to dominate artificial intelligence (AI) technology.

What happened

On Tuesday, NVIDIA’s shares rose by 3.7% to $135.87, pushing its market capitalisation to $3.341 trillion, surpassing Microsoft’s $3.314 trillion as its shares fell by 0.5%. This ascent comes shortly after NVIDIA overtook Apple, which saw its market value drop to $3.280 trillion following a 1.2% decline in its stock. NVIDIA’s surge in market value over the past year highlights a Wall Street craze fueled by optimism about the future of AI technology.

The chipmaker has significantly boosted the S&P 500 and Nasdaq to record highs. However, some investors are concerned that the high hopes for AI might fade if there is a slowdown in spending on the technology. NVIDIA has become the most traded company on Wall Street, with daily trading volumes averaging $50 billion, far surpassing the approximately $10 billion each for Apple, Microsoft, and Tesla.

Also read: Rebellions and Sapeon merge to challenge chips giants NVIDIA

Also read: Nvidia surges to become world’s most valuable company

Why it’s important

NVIDIA’s rise to the top is not just a testament to its success but also a reflection of the broader market’s faith in AI’s potential. The company’s stock has nearly tripled this year, driven by soaring demand for its superior AI processors. In comparison, Microsoft’s shares have only risen by about 19%. The insatiable demand for NVIDIA’s processors has left them in short supply, making the company the biggest beneficiary of the AI boom.

Tech giants like Microsoft, Meta Platforms, and Alphabet are fiercely competing to expand their AI capabilities, integrating the technology into their products and services. NVIDIA’s processors are considered the best in the market, further cementing its position as titan. However, analysts caution that any misstep could lead to a significant correction in NVIDIA’s stock, underscoring the volatile nature of the tech sector.

NVIDIA’s recent milestones include its stock reaching a record high and its market value jumping by over $100 billion. The company’s market cap has grown from $1 trillion to $3 trillion in just over a year, demonstrating its rapid ascent and the high demand for its products. Despite this meteoric rise, NVIDIA’s valuation has become more attractive to individual investors, with the company’s stock now trading at 44 times expected earnings, down from over 84 a year ago. This adjustment comes as NVIDIA recently executed a 10-for-one stock split, further enhancing its appeal.