Nvidia eclipses Microsoft as world’s most valuable company amid AI boom
Nvidia's stock has surged about 173% so far in 2024
18 June 2024 - 21:06
byShristi Achar, Medha Singh and Ankika Biswas
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Bengaluru — Nvidia became the world’s most valuable company on Tuesday, dethroning tech heavyweight Microsoft as its high-end processors play a central role in a race to dominate a surge in artificial intelligence (AI) technology.
Shares of the chipmaker climbed 3.5% to $135.60, lifting its market capitalisation to $3.336-trillion, just days after overtaking iPhone maker Apple to become the second-most valuable company.
Microsoft’s stock market value was $3.325-trillion as its shares dipped 0.2%. Apple’s stock slipped 1.3%, putting its value at $3.278-trillion.
Nvidia’s stock has surged about 173% so far this year, compared with a rise of about 19% in Microsoft shares, with demand for its top-of-the-line processors outpacing supply.
Tech giants Microsoft, Meta Platforms and Google-owner Alphabet are competing to build out their AI computing capabilities and dominate the emerging technology.
Tuesday’s gain lifted Nvidia’s stock to a record high and added more than $103bn to its market capitalisation. Nvidia commands more than 80% of the market share for AI chips, making it a major winner from surging AI development.
Since its blowout forecast about a year ago, the company has consistently breezed past Wall Street's lofty expectations for revenue and profit, with demand for its graphics processors far outstripping supply as companies rush to embed AI applications.
Nvidia executives said in May that demand for its Blackwell AI chips could exceed supply “well into next year”. Increasing the appeal for its highly valued stock among individual investors, Nvidia recently split its stock 10-for-one, effective on June 7.
“A stock split can reduce the price per share, making it more affordable for individual investors to buy. With Nvidia doing a 10:1 stock split, retail investors are the real winners here,” said Sam North, market analyst at investment platform eToro.
The company’s market value expanded from $1-trillion to $2-trillion in just nine months in February, while taking just over three months to hit $3-trillion in June.
Sharp increases in analysts’ expectations for Nvidia’s future earnings have outpaced its stellar stock gains, resulting in a fall in the stock’s earnings valuation.
Nvidia is trading at 44 times expected earnings, down from over 84 times expected earnings about a year ago, LSEG data showed.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Nvidia eclipses Microsoft as world’s most valuable company amid AI boom
Nvidia's stock has surged about 173% so far in 2024
Bengaluru — Nvidia became the world’s most valuable company on Tuesday, dethroning tech heavyweight Microsoft as its high-end processors play a central role in a race to dominate a surge in artificial intelligence (AI) technology.
Shares of the chipmaker climbed 3.5% to $135.60, lifting its market capitalisation to $3.336-trillion, just days after overtaking iPhone maker Apple to become the second-most valuable company.
Microsoft’s stock market value was $3.325-trillion as its shares dipped 0.2%. Apple’s stock slipped 1.3%, putting its value at $3.278-trillion.
Nvidia’s stock has surged about 173% so far this year, compared with a rise of about 19% in Microsoft shares, with demand for its top-of-the-line processors outpacing supply.
Tech giants Microsoft, Meta Platforms and Google-owner Alphabet are competing to build out their AI computing capabilities and dominate the emerging technology.
Tuesday’s gain lifted Nvidia’s stock to a record high and added more than $103bn to its market capitalisation. Nvidia commands more than 80% of the market share for AI chips, making it a major winner from surging AI development.
Since its blowout forecast about a year ago, the company has consistently breezed past Wall Street's lofty expectations for revenue and profit, with demand for its graphics processors far outstripping supply as companies rush to embed AI applications.
Nvidia executives said in May that demand for its Blackwell AI chips could exceed supply “well into next year”. Increasing the appeal for its highly valued stock among individual investors, Nvidia recently split its stock 10-for-one, effective on June 7.
“A stock split can reduce the price per share, making it more affordable for individual investors to buy. With Nvidia doing a 10:1 stock split, retail investors are the real winners here,” said Sam North, market analyst at investment platform eToro.
The company’s market value expanded from $1-trillion to $2-trillion in just nine months in February, while taking just over three months to hit $3-trillion in June.
Sharp increases in analysts’ expectations for Nvidia’s future earnings have outpaced its stellar stock gains, resulting in a fall in the stock’s earnings valuation.
Nvidia is trading at 44 times expected earnings, down from over 84 times expected earnings about a year ago, LSEG data showed.
Reuters
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