On Tuesday afternoon trading session, the stock price of American chip maker Nvidia rose by 3.2%, pushing the company’s market value to $3.33 trillion, surpassing Microsoft to become the most valuable publicly traded company globally.
Since the end of 2022, the continuous surge in Nvidia’s stock price has led to the company reaching historic highs. On Tuesday, the chip maker’s stock price rose to $135.21, increasing Nvidia’s market value by over $103 billion.
Earlier this month, Nvidia’s market value surpassed $3 trillion for the first time, surpassing Apple.
According to CNBC, Nvidia’s stock price has surged by over 170% so far this year, while Microsoft’s stock price has increased by only about 19%. Following Nvidia’s announcement of its first-quarter earnings in May, the stock price continued to rise. Since the end of 2022, the stock has increased more than ninefold.
In February of this year, the company’s market value expanded from $1 trillion to $2 trillion in just nine months, and it reached $3 trillion in June in a little over three months.
Nvidia dominates around 80% of the AI chip market used in data centers. In the most recent quarter, Nvidia’s data center business revenue grew by 427% year-on-year, reaching $22.6 billion, accounting for approximately 86% of the company’s total sales.
Founded in 1991, Nvidia was primarily a hardware company in its early decades, selling chips to run 3D games. However, in the past two years, as Wall Street recognized the importance of Nvidia’s chip production, the company’s stock price has skyrocketed. According to Forbes, the surge in stock price has pushed Nvidia’s co-founder and CEO Jensen Huang’s net worth over $117 billion, making him the 11th richest person globally.
Microsoft is one of the largest buyers of Nvidia’s Graphics Processing Units (GPUs), used in its Azure cloud services.
Nvidia has become the newly crowned holder of the title of the most valuable U.S. company. Over the past few years, Apple and Microsoft have been vying for this title. Nvidia’s rapid rise has been so significant that the company has not yet been included in the Dow Jones Industrial Average, a benchmark index of 30 stocks, including some of the most valuable companies in American history.
To increase the attractiveness of its high-priced stock to individual investors, Nvidia recently executed a stock split at a ratio of 10:1, effective from June 7.
“Stock splits can lower the price per share, making it more affordable for individual investors. With Nvidia’s 10:1 stock split, retail investors are the real winners,” said Sam North, a market analyst at investment platform eToro, to Reuters.