Microsoft has been dramatically toppled as the world’s most valuable public company.
Nvidia, which had only overtaken Apple for the number two spot earlier this month, dethroned Microsoft during trading on Tuesday as its shares rose by more than 3%.
The stock has risen more than 170% this year given the chipmaker’s leading position in the artificial intelligence (AI) race with 80% of the processor market.
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The latest upward move took its market value to $3.326trn.
It had hit $2trn in February.
The company’s meteoric rise marks another milestone in the tech sector, which Apple had dominated since it launched the iPhone in 2007.
Apple only lost its crown to Microsoft earlier this year as worries over iPhone demand weighed on the stock.
Microsoft’s investment in ChatGPT-maker OpenAI at the same time was seen as beneficial for its shares as it took an early lead in generative AI.
Analysts said demand for Nvidia’s shares was boosted earlier this month by a stock split that created more shares and made them more attractive to individual investors.
They had cost more than $1,000 each before the split on 7 June.
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Microsoft’s shares have risen just 19% in comparison during the year to date – a surge which would usually be seen as satisfactory but for Nvidia’s enviable performance.
Demand for the California-based firm’s processors is exceeding supply while Microsoft, Meta Platforms and Google’s owner spend big in the race to develop AI computing capabilities.
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Market watchers said the rise in Nvidia’s stock on Tuesday alone added more than $100bn to its market value.
Sam North, an analyst at investment platform eToro, credited anticipation of the stock split – and the split itself – for the recent share price surge.
“A stock split can reduce the price per share, making it more affordable for individual investors to buy”, he explained.
“With Nvidia doing a 10:1 stock split, retail investors are the real winners here”.
Content Source: news.sky.com