Nvidia has just achieved a significant milestone by surpassing Microsoft to become the world’s most valuable public company. On Tuesday, Nvidia’s stock price jumped by 3.5%, ending the day at nearly $136 per share. This increase boosted the company’s market value to an incredible $3.34 trillion, only a few days after it overtook Apple for the number two spot.
Nvidia’s rapid rise is mainly due to its leadership in the artificial intelligence (AI) market. The company makes high-powered computer chips essential for AI technology and controls about 80% of this market. This dominance has driven its stock to skyrocket by 170% this year and nearly 4,500% over the past five years.
Many analysts are impressed with Nvidia’s performance. Ben Barringer from Quilter Cheviot said, “The company has once again cleared a very high hurdle. Demand is showing no signs of switching off either.” Investors are also hopeful that Nvidia’s earnings will keep growing, pushing its stock even higher.
Rosenblatt Securities’ analyst Hans Mosesmann predicts Nvidia’s stock could reach around $200 per share, which would value the company at nearly $5 trillion. Daniel Ives from Wedbush Securities compared Nvidia’s chips to “the new gold or oil” because of their importance in the AI era.
However, not everyone is completely optimistic. Sandeep Gupta, a credit analyst at Barclays, pointed out that Nvidia might struggle to maintain its large market share due to increasing competition. He also questioned how Nvidia’s customers will make money from AI software.
The surge in Nvidia’s stock has led to some of its executives selling shares. Bloomberg reported that they have sold about 770,000 shares this year, totaling over $700 million. Last week, CEO Jensen Huang sold $31 million worth of his shares.
Nvidia’s new position as the world’s most valuable company highlights its crucial role in the AI industry. As Nvidia, Microsoft, and Apple continue to compete, the race to reach a $4 trillion market cap will be exciting to watch. This competition is expected to drive further advancements in technology, benefiting everyone.
