Nvidia (NVDA.O) has zoomed up the ranks to become the world’s most valuable company, fueled by sky-high investor confidence in the future of artificial intelligence.
On Tuesday, Nvidia’s shares jumped 3.5%, boosting its market cap to a whopping $3.34 trillion. This leapfrogged past tech giants Microsoft (MSFT.O) and Apple (AAPL.O), who had been duking it out for the top spot in recent days.
The dramatic rise in Nvidia’s market value is driven by insatiable demand for its chips, which have become the gold standard in AI applications. The company’s stock has skyrocketed over 170% this year and has surged an eye-popping 1,100% since hitting rock bottom in October 2022.
Nvidia’s stellar earnings and the buzz around AI technologies are propelling its meteoric ascent. The company’s market value shot up from $2 trillion to $3 trillion in just 96 days, a testament to the wild enthusiasm of the market.
For some perspective, Microsoft took a leisurely 945 days and Apple 1,044 days to make the same leap from $2 trillion to $3 trillion, according to Bespoke Investment Group.
Howard Silverblatt of S&P Dow Jones Indices points out that only 11 U.S. companies have snagged the top spot in market value since 1925, making Nvidia’s achievement even more remarkable.
As Nvidia enjoys the spotlight, it’s a nail-biter for investors who remember the rocky roads of previous top contenders. While Nvidia’s performance is impressive, analysts warn that maintaining such dazzling returns will require ongoing growth and savvy competition management.
Currently, Nvidia’s solid earnings are driving its stock price higher. The company reported a revenue surge to $26 billion in the latest quarter, with net income soaring seven-fold to $14.9 billion.
Looking ahead, analysts expect Nvidia’s revenue to nearly double to $120 billion in the current fiscal year and then grow by 33% to $160 billion in fiscal 2026, according to LSEG data.
