Nvidia on Tuesday surpassed Microsoft to become the world’s most valuable business, as its high-end processors play a critical role in the race to dominate artificial intelligence technologies.
Shares of the chipmaker rose 3.5 percent to $135.58, bringing its market capitalization to $3.335 trillion (approximately Rs. 2,78,15,901 crore), just days after it surpassed iPhone maker Apple to become the second most valuable corporation, according to gadgeta360.
Apple’s stock fell more than 1%, leaving its value at $3.286 trillion.
Nvidia’s spectacular increase in market value over the last year has become emblematic of a Wall Street frenzy fueled by hope for new AI technology.
While Nvidia’s rise has propelled the S&P 500 and Nasdaq to record highs, some investors worry that unfettered euphoria about AI may dissipate if evidence emerges of a slowdown in expenditure on the technology.
“It’s Nvidia’s market; we’re all just trading in it,” said Steve Sosnick, chief market strategist at Interactive Brokers.
According to LSEG data, Nvidia is now the most traded business on Wall Street, with daily turnover exceeding $50 billion, compared to about $10 billion for Apple, Microsoft, and Tesla. The chipmaker currently accounts for around 16% of all trade in S&P 500 companies.
Nvidia’s stock has nearly tripled this year, compared to a 19% increase in Microsoft shares, as demand for its high-end chips outpaces supply.
Microsoft, Meta Platforms, and Alphabet, which owns Google, are competing to expand their AI computing capabilities and incorporate the technology into their goods and services.
An insatiable appetite for Nvidia’s AI processors, which are seen as far superior to competitors’ offerings, has resulted in a scarcity of them, and many investors see Nvidia as the greatest winner to date in accelerating AI development.
“Nvidia has been getting a lot of positive attention and has been doing a lot of things very correctly, but a small misstep is likely to cause a major correction in the stock, and investors should be careful,” said Oliver Pursche, senior vice president at Wealthspire Advisors in New York.
Nvidia’s stock rose to a record high on Tuesday, adding more than $110 billion to its market capitalization, which is equivalent to the total value of Lockheed Martin.
