Nvidia has overtaken tech giants Microsoft and Apple to become the world’s most valuable company, a record-breaking rise in its shares that led to this milestone.
Nvidia’s shares rose by approximately 3.5% on Tuesday (18 June, 2024), boosting its market value to around $3.34 trillion. This surge has pushed Nvidia ahead of Microsoft and Apple in terms of market capitalisation.
The significant increase in Nvidia’s market value is largely driven by the growing demand for its AI-optimized chips.
The company’s shares have soared over 170% just this year, and have skyrocketed by around 1,100% since their low in October 2022.
Exceptional earnings and increasing investor interest in AI have supported the company’s rapid rise. Nvidia’s market value jumped from $2 trillion to over $3 trillion in just 96 days.
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According to Bespoke Investment Group, it took Apple 1,044 days and Microsoft 945 days, respectively, to reach the same growth.
Microsoft’s share price fell by 0.45%, bringing its market value to $3.317 trillion. Meanwhile, Apple’s share price declined by over 1%, reducing its value to $3.286 trillion.
Nvidia’s share price has nearly tripled this year, compared to an approximately 19% increase in Microsoft’s shares.
Last week, Nvidia implemented a 10-for-one stock split, making its high-valued shares more attractive to individual investors.
The rise in Nvidia shares and its remarkable increase in market value over the past year have been caused by excitement surrounding rising Artificial Intelligence (AI) technology.
Nvidia’s stock rally has also raised the S&P 500 and Nasdaq to record highs. Additionally, Nvidia has become the most traded company on Wall Street, with a recent daily trading volume averaging $50 billion, compared to about $10 billion each for Apple, Microsoft, and Tesla, according to LSEG data. Nvidia now represents approximately 16% of all trading in S&P 500 companies.
According to Reuters, the high demand for Nvidia’s AI processors, which are considered much stronger than competitors’, has resulted in restricted availability. Many investors believe that Nvidia has benefited the most from recent AI development.
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Analysts say that there are only 11 U.S. companies that have held the top market value position on a closing basis since 1925.
Nvidia’s First Quarter Results for FY 2025
In a press release in May, NVIDIA announced its first-quarter revenue for the period ending April 28, 2024, reaching $26.0 billion. This represents an 18% increase from the previous quarter and a remarkable 262% rise from the same period last year.
GAAP earnings per diluted share for the quarter were $5.98, showing a 21% increase from the previous quarter and a 629% jump from last year. Non-GAAP income per diluted share was $6.12, a 19% spike over the previous quarter and 461% higher than a year ago.
Also, NVIDIA is increasing its quarterly cash dividend by 150%, raising it from $0.04 to $0.10 per share of common stock.
On a post-split basis, this increase amounts to $0.01 per share. The new dividend will be paid on Friday (June 28, 2024) to shareholders recorded by Tuesday (June 11, 2024).
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