Nvidia, the leading chip maker, has become the world's most valuable, overtaking Microsoft and Apple, on strong demand for its artificial intelligence products and investors' hopes for further growth in the industry.
Conquering the top
Market dominance
Nvidia shares soared, making the company the most valuable in the world. According to Reuters, this underscores the enormous role that investors believe artificial intelligence will play in the global economy in the coming years.
Thanks to a 3.5% increase in stock value, Nvidia's market cap has reached a staggering $3.34 trillion. This allowed the semiconductor manufacturer to overtake Microsoft (market value $3.317 trillion) and Apple ($3.286 trillion), which were in a fierce battle for leadership positions.
Chip advantage
The reason for the unprecedented rise in the market value of Nvidia lies in the huge demand for its microcircuits, which are considered to be much more powerful than their competitors. The company's stock is up more than 170% year-to-date and about 1,100% since October 2022.
It only took Nvidia 96 days for its market cap to grow from $2 trillion to $3 trillion. By comparison, it took Microsoft and Apple 945 and 1,044 days, respectively, to achieve a similar result.
The historic path to the top
Until recently, only 11 US companies since 1925 had become the most valuable in the world by market value at the end of the trading day. The subsequent fate of the past leaders was different.
Microsoft was number one in the late 90s, but its stock later fell in the early 2000s after the dotcom crash. Only in the second half of the last decade did things pick up again.
Exxon Mobil was becoming the world's most valuable company in the 2000s, but its stock fell due to the drop in oil prices.
A lesson from Cisco
An instructive story is the example of the Cisco company. Its stock peaked in March 2000 during the dot-com boom, when investors often overvalued Internet companies.
Success backed by earnings
Nvidia's current prosperity is backed by its earnings. The company's revenue tripled last quarter to $26 billion, and net income jumped sevenfold to $14.9 billion.
Revenue for the current fiscal year is expected to roughly double to $120 billion, and then will grow by another 33% in 2026 to $160 billion.
Thanks to impressive financial results, Nvidia shares, despite the high price, do not appear to be overvalued. Nvidia's price-to-earnings-per-share ratio is now 43, which is higher than at the start of the year (25) but lower than last year. By comparison, the comparable figure for the entire S&P 500 index is 21.
Other AI Players
While Nvidia is the growth leader, it is not the only company benefiting from artificial intelligence. Shares of other tech giants, including Super Micro Computer and Arm Holdings, have also jumped sharply this year.
Glossary
- Nvidia is a leading American manufacturer of graphics processors widely used in AI and machine learning.
- Microsoft is a world-renowned technological corporation, developer of software and computer equipment.
- Apple is a cult American company that produces smartphones, computers, tablets and other electronic devices.
- Exxon Mobil is the world's largest private oil company headquartered in the United States.
- Cisco is an American manufacturer of network equipment and software for computer networks.
Link
- https://www.reuters.com/technology/artificial- intelligence/ai-fever-drives-nvidias-rise-worlds-most-valuable-company-2024-06-18/
- https:// www.reuters.com/markets/us/nvidia-becomes-worlds-most-valuable-company-2024-06-18/
Answers to question
Why has Nvidia's market value skyrocketed?
How much has the price of Nvidia shares increased?
Do Nvidia's financials justify such a high stock price?
How long can Nvidia remain the world's most valuable company?
What other companies benefit from the development of artificial intelligence?
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Discussion of the topic – Nvidia is the most valuable company in the world thanks to AI: the market capitalization has increased to $3.34 trillion
Shares of Nvidia rose sharply, making the company the most valuable in the world with a capitalization of $3.34 trillion. This underscores the importance of artificial intelligence to the global economy.
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Андрій
The wave of AI is changing everything! Nvidia takes the lead, ahead of the tech giants. Artificial intelligence is the future 🚀
Ганна
Nvidia's growth is truly impressive! Investors expect AI to have a huge impact on the economy. However, isn't their value overestimated? 🤔
Віктор
Nvidia's financial results are truly impressive. A threefold increase in revenue per quarter and a sevenfold increase in profit is unprecedented! AI chips are clearly in high demand. 💰
Марія
I admire the speed with which Nvidia reached $3 trillion in value - just 96 days! No other company could boast of such speed. 🌟
Григорій
This artificial intelligence is just a fad. After a few years, it will be forgotten, like many other trends. It is better not to get carried away by this boom and not to invest money. 👎
Ганна
Hryhoriyu, AI is already actively used in various industries, and its influence will only grow. This is not just a trend, but a revolutionary technology. 💻
Андрій
I agree with Anna. AI is changing the way we interact with technology. Think of ChatGPT and DALL-E - they have already become indispensable tools. And this is just the beginning! 🌐
Марія
Absolutely correct! AI is much more than a trend. This is a new era of technology that will touch every industry. Nvidia is a real leader in this market. 🏆