- US computer chip maker Nvidia has become the world’s most valuable company after share price hit all-time high
- The stock closed at nearly $136, up 3.5%
- The chips are essential for AI software and the growing demand has boosted its sales and profits in recent years
- Nvidia’s market value to $3.34 trillion (£2.63 trillion)
Nvidia becomes world’s most valuable company
Nvidia became the world’s most valuable company on Tuesday after its share price hit an all-time high.
The stock closed at nearly $136, up 3.5%, surpassing Microsoft in value. Earlier this month, Nvidia also overtook Apple.
Nvidia produces computer chips essential for artificial intelligence (AI) software. Growing demand for its products has significantly boosted its sales and profits over recent years.
Many investors are optimistic about Nvidia’s future earnings potential, driving the share price higher, though some have questioned the company’s high valuation.
Tuesday’s share price surge pushed Nvidia’s market value to $3.34 trillion (£2.63 trillion), nearly doubling since the beginning of the year.
Eight years ago, Nvidia’s stock was worth less than 1% of its current value.
The competition among AI developers is intense, with Microsoft, Google-owner Alphabet, Meta, and Apple all vying to create leading AI products.
This competitive landscape benefits Nvidia, which controls a vast majority of the AI chip market.
As a result, investors believe Nvidia’s value will continue to rise. The company’s sales and profits have consistently exceeded many analysts’ expectations.
In May, following Nvidia’s latest financial results, Quilter Cheviot technology analyst Ben Barringer noted that the company had “once again cleared a very high hurdle,” adding that “demand is showing no signs of switching off either.”
However, some remain cautious.
In February, Barclays credit analyst Sandeep Gupta suggested that maintaining Nvidia’s large market share would be challenging due to increasing competition and raised concerns about how Nvidia’s customers would monetize AI software.