AI chipmaker Nvidia has overtaken Apple and Microsoft to become the world’s most valuable company, the latest milestone as Wall Street investors chase the burgeoning sector of artificial intelligence.
Shares of California-based Nvidia, which is in hot demand from industry leaders ranging from Microsoft-backed OpenAI to billionaire Elon Musk’s Tesla and xAI, were up more than 3% in midday trading on Tuesday. Nvidia shares are up more than 180% since the beginning of the year.
The latest rise gives Nvidia, whose CEO Jensen Huang is known for his trademark leather motorcycle jacket, a staggering market capitalization of $3.33 trillion.
Microsoft dropped to second place with a valuation of $3.32 trillion, followed by Apple at $3.28 trillion.
Microsoft shares were flat, while Apple shares fell more than 1%.
Hwang, who is also a co-founder of Nvidia, has been one of the big beneficiaries of the company’s soaring stock price. He is now the 12th richest person in the world, with a personal net worth estimated at $115 billion, according to the Bloomberg Billionaires Index.
Long known as a maker of high-performance graphics cards for PC gamers, Nvidia has emerged in recent years as a major supplier to companies racing to develop advanced AI.
The company controls about 80% of the market for computer chips that power AI data centers. According to CNBC:.
In its first-quarter earnings report released last month, Nvidia revealed that its data center division revenue rose to $22.6 billion, a staggering 427% increase from the same period last year.
Nvidia’s rise has attracted the attention of federal antitrust regulators.
According to reports, the Department of Justice has launched an investigation into the semiconductor manufacturing company’s operations and whether it has violated competition laws.
in Interview with FT, Jonathan Cantor, the Justice Department’s antitrust director, said advanced chips have become a “scarce resource” and suggested he was investigating the process by which chipmakers decide which companies to supply critical products to.
Microsoft and Apple are each vying for their own AI shoes: Microsoft invested $13 billion in OpenAI, a deal that is itself under regulatory scrutiny, while Apple recently announced it will bring a suite of AI features to its products this fall.
Apple has also partnered with OpenAI.
Despite the astronomical valuations, some analysts say tech companies are still poised for growth.
“Over the next year, the race for $4 trillion in market cap in tech will be between NVIDIA, Apple and Microsoft,” Wedbush analyst Dan Ives said in a client note. “With the Fourth Industrial Revolution in full swing, NVIDIA’s GPU chips will essentially become the new gold or oil in tech as more businesses and consumers rapidly follow this path.”
