Nvidia’s Market Cap Reaches Over $3.3 Trillion as Stock Soars
Demand for Nvidia’s AI Chips Surpasses Supply
Nvidia’s Stock Has Nearly Tripled in 2024
June 18 (Reuters) – Nvidia (NVDA.O) has become the world’s most valuable company, surpassing tech giant Microsoft (MSFT.O), as its advanced processors play a crucial role in the race to lead artificial intelligence technology.
Shares of the chipmaker rose 3.5% to $135.58, boosting its market value to $3.335 trillion, just days after overtaking iPhone maker Apple (AAPL.O) to become the second most valuable company.
Microsoft’s market capitalization stood at $3.317 trillion as its shares declined by 0.45%. Apple’s stock dropped more than 1%, bringing its value to $3.286 trillion.
Nvidia’s remarkable rise in market value over the past year symbolizes a Wall Street craze driven by optimism about burgeoning AI technology. While Nvidia’s surge has propelled the S&P 500 (.SPX) and Nasdaq (.IXIC) to record highs, some investors fear that unchecked enthusiasm about AI could fade if there are signs of reduced spending on the technology.
“It’s Nvidia’s market; we’re all just trading in it,” said Steve Sosnick, chief market strategist at Interactive Brokers. Nvidia has also become the most traded company on Wall Street, with daily turnover recently averaging $50 billion, compared to around $10 billion each for Apple, Microsoft, and Tesla (TSLA.O), according to LSEG data. The chipmaker now accounts for about 16% of all trading in S&P 500 companies.
Nvidia’s stock has nearly tripled this year, compared with a roughly 19% increase in Microsoft shares, with demand for its top-tier processors exceeding supply. Tech giants Microsoft, Meta Platforms (META.O), and Google-owner Alphabet (GOOGL.O) are vying to enhance their AI computing capabilities and incorporate the technology into their products and services.
An insatiable demand for Nvidia’s AI processors, seen as significantly superior to competitors’ offerings, has led to a tight supply, with many investors viewing Nvidia as the biggest beneficiary of the rapid AI development.
“Nvidia has been receiving a lot of positive attention and has been executing many things very well, but a minor misstep could lead to a significant correction in the stock, and investors should be cautious,” said Oliver Pursche, senior vice president at Wealthspire Advisors in New York.
Tuesday’s rise pushed Nvidia’s stock to a new high, adding over $110 billion to its market capitalization, equivalent to the entire value of Lockheed Martin (LMT.N). The company’s market value grew from $1 trillion to $2 trillion in just nine months in February and took slightly over three months to reach $3 trillion in June.
Since its impressive forecast about a year ago, the company has consistently exceeded Wall Street’s high expectations for revenue and profit, with demand for its graphics processors far outstripping supply as companies hurry to integrate AI applications. Nvidia executives said in May that demand for its Blackwell AI chips could outpace supply “well into next year.”
Sharp increases in analysts’ projections for Nvidia’s future earnings have surpassed its stellar stock gains, decreasing its earnings valuation. Nvidia recently traded at 44 times expected earnings, down from over 84 about a year ago, LSEG data showed.
Enhancing the appeal of its highly valued stock among individual investors, Nvidia recently conducted a 10-for-one stock split.
Certainly! Here’s a formatted table suitable for a blog or article:
| Event/Statistic | Details |
|------------------------------------------------------------|--------------------------------------------------|
| Nvidia's Market Cap | $3.335 trillion |
| Nvidia's Stock Price | $135.58 (up 3.5%) |
| Microsoft's Market Cap | $3.317 trillion |
| Apple's Market Cap | $3.286 trillion |
| Nvidia's Stock Increase in 2024 | Nearly tripled |
| Nvidia's Daily Trading Turnover | Average $50 billion |
| Nvidia's Percentage of S&P 500 Trading | 16% |
| Nvidia's Stock Valuation (June 2024) | 44 times expected earnings (down from over 84) |
| Nvidia's Recent Stock Split | 10-for-one |This table summarizes the key metrics and events surrounding Nvidia’s rise as the world’s most valuable company, showcasing its market capitalization, stock performance, and other relevant financial details.
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