Nvidia overcomes Microsoft becoming the most valuable business

Nvidia's shares increased by 3.6%, boosting its market worth to a record $3.34 trillion
Nvidia overcomes Microsoft becoming the most valuable

The computer world's pecking order has shifted once more, and this time it is Nvidia's AI-driven frenzy that is driving the move. The creator of artificial intelligence and graphics chips is now the world's most valuable public corporation. On Tuesday, Nvidia's stock rose 3.6%, bringing its market valuation to a record $3.34 trillion. This increase has pushed Nvidia ahead of Microsoft, which is currently valued at $3.32 trillion. Nvidia surpassed Apple for the first time earlier this month when it exceeded the $3 trillion mark. The iPhone maker's shares are presently trading at $214.29.

Nvidia's stock has surged by more than 170% since the beginning of the year. This excellent success was further boosted by the company's first-quarter profits announcement in May, which increased the company's market capitalization from $2.2 trillion a few months before. The stock's worth has increased more than ninefold since the end of 2022, a development trajectory that has coincided with the advent and advancement of generative AI. Nvidia shares are currently trading at $135.58. The business currently controls over 80% of the market for AI chips used in data centers. This market segment has grown rapidly as digital behemoths such as OpenAI, Microsoft, Alphabet, Amazon, and Meta compete to acquire the processors required for developing and operating large-scale AI models. Nvidia's data center revenue increased by 427% year on year in the most recent quarter, reaching $22.6 billion. This area now accounts for around 86% of Nvidia's overall sales.

Nvidia's history began in 1991, when the company launched its graphics processing units (GPUs) to serve the enthusiast PC gaming market. Unlike traditional central processing units (CPUs), GPUs are built for parallel processing, allowing them to manage large datasets and conduct complex calculations at the same time. Over time, the company expanded into developing chips for bitcoin mining and providing cloud gaming subscriptions. However, during the last two years, Nvidia has transformed into a major participant in the AI business. Wall Street has increasingly recognized the company's crucial position in the AI revolution, resulting in a considerable increase in its stock price. This expansion has also significantly enhanced the wealth of Nvidia's co-founder and CEO, Jensen Huang, who is now one of the world's wealthiest people.

Nvidia is also quickly catching up with the other AI titans, having recently developed platforms such as Blackwell and Rubin, which are specifically designed for real-time generative AI and offer considerable efficiency benefits over earlier systems. Blackwell promises to cut costs and energy consumption by up to 25 times, while Rubin, revealed at Computex 2024, has new GPUs and a central processor known as "Vera," which aims to further transform AI computing capabilities. While Nvidia has dominated, Microsoft has also benefited greatly from the AI explosion. Microsoft's stock has gained by almost 20% this year. The corporation has made major investments in AI, most notably through a significant ownership in OpenAI and the integration of AI models into its key products, such as Office and Windows. Microsoft is a significant consumer of Nvidia GPUs, which it utilizes to power its Azure cloud services and AI applications. The software company recently announced Copilot+, a new line of laptops built to run AI models.