Nvidia ( NVDA ) made headlines on Tuesday by overtaking Microsoft ( MSFT ) to become the world’s most valuable company. With a staggering market capitalization of $3.444 trillion, Nvidia surpassed Microsoft’s valuation of $3.441 trillion by a narrow margin. This remarkable shift signals a new era in technology, particularly in the fields of artificial intelligence and graphics processing.
Since reaching a 12-month low of just over $94 in early April, Nvidia’s stock has surged approximately 50%, adding more than $1 trillion to its market capitalization. This surge comes as investors are flocking back into the so-called “Magnificent Seven” Big Tech stocks, which include the likes of Amazon and Google, alongside Nvidia and Microsoft. The tech sector’s resilience amid economic uncertainties has reignited investor confidence.
Recent developments have also fueled Nvidia’s impressive stock performance. The company reported better-than-expected quarterly financial results and a promising outlook on May 28. These results highlight that the chipmaker’s revenue continues to grow despite facing challenges such as losing billions in sales due to a U.S. export ban affecting its ability to sell to China. In fact, it has managed to overcome significant supply chain hurdles to deliver its advanced Blackwell AI servers to major clients like Microsoft.
On Tuesday, Nvidia’s stock climbed 2.8%, buoyed by its contract chip manufacturer, TSMC, affirming the sustained demand for AI chips. This positive sentiment in the market was reinforced by CoreWeave ( CRWV ), a key customer of Nvidia, which secured a new data center lease. Once operational, this facility will be filled with Nvidia’s chips, further driving demand in the market.
It’s worth noting that Nvidia’s stock hasn’t been without volatility. This year, investors have expressed apprehension regarding the sustainability of AI demand, particularly as uncertainties linger around the tech industry. Concerns were heightened following the turmoil caused by Trump’s trade policies, which significantly affected chipmakers, including Nvidia. Despite these challenges, Nvidia’s recent gains put its stock back into positive territory, with a roughly 5% increase year-to-date compared to Microsoft’s almost 10% growth.
Until recently, Microsoft held the title of the world’s most valuable company since early May, frequently trading places with Apple ( AAPL ) atop the market capitalization leaderboard. Nvidia is experiencing a renaissance, having last held this prestigious position in January. Apple’s stock, on the other hand, has faced headwinds in 2023, declining about 19% as it contends with fierce competition and the looming threat of tariffs on iPhone imports.
In this rapidly changing landscape, Nvidia’s ascent as the most valuable company reflects not only its robust financial performance but also the transformative potential of AI technologies. As the market continues to evolve, all eyes will remain on how Nvidia leverages its technological advancements and market strategies to maintain its leading position in a fiercely competitive arena.
Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @laurabratton.bsky.social. Email her at laura.bratton@yahooinc.com.
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