Nvidia beats Microsoft to become world’s most valuable company

Shares of chipmaker Nvidia climbed to a record high on Tuesday, making it the world’s most valuable company.

It’s now worth $3.34 (£2.63), having almost doubled in price since the start of the year.

The stock closed the day at nearly $136, up 3.5%, making it more valuable than fellow tech giant Microsoft. Earlier this month, it surpassed Apple.

The California company’s meteoric rise has been fueled by its dominance in what analysts call “tech’s new gold or oil” – the chips needed for artificial intelligence (AI).

Chris Penrose, Nvidia’s global head of telecom business development, said at the event in Copenhagen that the record valuation is the culmination of more than 30 years of work in computing and artificial intelligence.

He also predicted further growth for the industry.

“The generative AI journey is truly transforming enterprises and telecommunications companies around the world,” he said.

“We’re just getting started.”

Wedbush Securities analysts agree.

“We believe the race for the $4 trillion market cap in the technology sector will take center stage next year between Nvidia, Apple and Microsoft,” the company said in a report earlier this week.

However, other commentators have questioned whether there will be big gains ahead given the increasing competition Nvidia faces.

But there’s no doubting how spectacularly it’s grown.

Eight years ago, the stock was worth less than 1% of its current price.

At the time, Nvidia’s value came from competing with rival AMD to build the best graphics cards.

In recent years, it has benefited from a surge in demand for chips that train and run generative artificial intelligence models, most notably OpenAI’s ChatGPT.

The company also benefited greatly from the Bitcoin mining boom in 2020, with its graphics card sales rising sharply.

The tech giant’s rise echoes the increasingly high-profile profile of its boss, Jensen Huang.

Some have dubbed the 61-year-old electrical engineer the “Taylor Swift of tech” because of the celebrity status he has achieved.

Competition among AI developers is fierce. Technology giants such as Microsoft, Google parent company Alphabet, Meta and Apple are all working hard to build world-class products.

This competition is good for Nvidia, which in addition to developing its own artificial intelligence technology, also dominates the vast majority of the artificial intelligence chip market.

In recent years, Nvidia’s sales and profit figures have exceeded many analysts’ expectations.

In May, following the release of its latest financial results, Quilter Cheviot technical analyst Ben Barringer said the company had “cleared a very high hurdle again.”

“Demand also shows no signs of stopping,” he added.

However, a few are more cautious.

In February this year, Barclays credit analyst Sandeep Gupta said that Nvidia’s huge market share will be difficult to maintain given the increasing number of competitors, and questioned how Nvidia’s customers will monetize artificial intelligence software. change.