NVIDIA becomes more valuable than Microsoft as share price rockets

By the close of trading, the stock had risen to nearly $136, an increase of 3.5%, surpassing the value of Microsoft. It had already overtaken Apple earlier in the month.

This remarkable feat is largely attributed to its dominant role in the AI sector, where it provides approximately 80% of the semiconductor chips used in generative AI technology.

Investor optimism about NVIDIA’s potential for further earnings growth has driven the share price up, although some have expressed concerns about its high valuation.

With Tuesday's rally, the company is now valued at $3.34tn (£2.63tn), almost double its market value from the beginning of the year. Eight years ago, Nvidia's stock was worth less than 1% of its current value.

Just a few weeks ago, at COMPUTEX 2024, NVIDIA's Founder and CEO Jensen Huang delivered a keynote showcasing significant advancements in AI and high-performance computing. Huang’s keynote underscored NVIDIA’s leadership in AI and high-performance computing, with new hardware and software innovations poised to drive future advancements in the field.

Daniel Bathurst, Head of Product at European startup, Nscale, a fully vertically integrated AI Cloud provider, comments on the number of players entering the AI battleground, and catching up with current top dog Nvidia through rapid innovation: “Nvidia’s relentless rise to the top of the leader board illustrates a crucial point: powerful hardware is the foundation upon which the AI revolution is built. As enterprise and startups alike bet big on AI, more players are entering this arena and catching up quickly. In this battleground for AI spend, constant innovation is king.

"But, while powerful chips are a key ingredient, the AI ecosystem is more than just hardware. We need a diverse offering at the chip, hardware, and software level to support a thriving, sustainable AI landscape. As AI continues to develop, collaboration and diverse innovation in every element of the infrastructure will be crucial to unlocking its full potential.”