Nvidia surpasses Microsoft and Apple to become the world's most valuable company

Company News

by Glenn Dyer

For the first time ever, Nvidia on Tuesday leapfrogged Microsoft and Apple to become the most valuable company in the world.

Following months of explosive share price growth driven by demand for its chips and an investor frenzy over artificial intelligence, the shares jumped 3.5% on Tuesday, against falls for its two rivals.

Nvidia’s rise on Tuesday gave it a closing market value of about $US3.4 trillion - the highest ever closing value.

That pushed the semiconductor bellwether past Microsoft ($US3.32 trillion) and Apple ($US3.29 trillion), which, with Nvidia, have been three trillion-plus companies since last Friday.

While analysts claim its surge has been driven by demand for its chips, which are the standard in the AI space, there’s also an increasing FOMO (fear of missing out) factor for investors large and small.

Having a market holiday on Wednesday in the U.S. helped push demand for Nvidia shares higher on Tuesday.

The company's shares are up more than 170% this year and have risen about 1,100% since their October 2022 low. Apple shares are ‘only’ up 15% year to date, and Microsoft shares have gained more than 20%.

The broader market measure, the S&P 500, is up more than 15%, and the Nasdaq has gained more than 20%. However, the Dow remains stuck well behind, up just 2.9% since the start of the year, even though Apple and Microsoft are members of the 30-stock index. Reuters pointed out that Nvidia’s market value took just 96 days to go from $US2 trillion to $US3 trillion.

Microsoft took 945 days to go from $US2 trillion to $US3 trillion, while Apple took 1,044 days to make the leap, according to Bespoke Investment Group.

Previously, just 11 US companies since 1925 have reached the top spot in market value on a closing basis, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

Microsoft was No. 1 in the late 1990s, but then its shares struggled for years during the early 2000s following the dotcom bubble, only to come roaring back in the latter half of the last decade under new managers and with a move into the cloud and then AI.

Exxon Mobil became the world’s most valuable company in the 2000s, but its shares retreated following a slump in oil prices during the GFC and then the pandemic.

General Electric, now broken up, was another most valuable stock for a while, as was Amazon, which was worth $US1.9 trillion at Tuesday’s close.

Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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