On Tuesday, Nvidia experienced a significant surge in its share price, with a rally of over 3%. This propelled the chip maker to claim the title of the world’s most valuable company, surpassing tech giant Microsoft. According to Reuters, Nvidia shares climbed by 3.5% to reach $135.58, resulting in a remarkable increase in its market capitalization by over $110 billion, totaling $3.335 trillion. This achievement came just days after Nvidia surpassed Apple to become the second most valuable company. In February, the company’s market value grew from $1 trillion to $2 trillion in a span of nine months, and it took just over three months to reach the $3 trillion mark in June.
In contrast, Microsoft experienced a decline of 0.45% in its share price, resulting in a stock market value of $3.317 trillion. Apple also faced a slip of over 1% in its share price, leaving its value at $3.286 trillion.
Nvidia’s share price has nearly tripled this year, showcasing an impressive performance compared to Microsoft’s modest 19% rise in shares. Last week, Nvidia implemented a 10-for-one stock split, which further enhanced the appeal of its highly valued stock among individual investors.
The surge in Nvidia shares and its remarkable increase in market value over the past year can be attributed to the widespread optimism surrounding emerging Artificial Intelligence (AI) technology.
The surge in Nvidia’s stock price has not only propelled the S&P 500 and Nasdaq to new record highs, but it has also made Nvidia the most actively traded company on Wall Street. According to LSEG data, the daily turnover for Nvidia averages around $50 billion, significantly surpassing the turnovers of Apple, Microsoft, and Tesla, which hover around $10 billion each. As a result, Nvidia now represents approximately 16% of all trading in S&P 500 companies. This heightened demand for Nvidia’s AI processors, which are widely regarded as superior to those of its competitors, has led to a scarcity in supply. Many investors see Nvidia as the frontrunner in benefiting from the rapid growth of AI development. This information was reported by Reuters.