Economy Nvidia passes Microsoft in market cap to become most valuable public company

[LeonardoBjj]

Kif Leswing@KIFLESWING

• Nvidia, which is up more than ninefold since the end of 2022, has surpassed Microsoft to become the most valuable public company in the world.
• The chipmaker passed the $3 trillion market cap mark in early June, joining Microsoft and Apple in that club.
• Nvidia has been the primary beneficiary of the recent boom in generative artificial intelligence.

Nvidia, long known in the niche gaming community for its graphics chips, is now the most valuable public company in the world.

Shares of the chipmaker climbed 3.6% on Tuesday, lifting the company’s market cap to $3.34 trillion, surpassing Microsoft, which is now valued at $3.32 trillion. Earlier this month, Nvidia hit $3 trillion for the first time, and passed Apple.

Nvidia shares are up more than 170% so far this year, and went a leg higher after the company reported first-quarter earnings in May. The stock has multiplied by more than ninefold since the end of 2022, a rise that’s coincided with the emergence of generative artificial intelligence.

Apple shares fell 1.1% on Tuesday, giving the iPhone maker a $3.29 trillion market value.

Nvidia has about 80% of the market for AI chips used in data centers, a business that’s ballooned as OpenAI, Microsoft, Alphabet, Amazon, Meta and others have raced to snap up the processors needed to build AI models and run increasingly large workloads.

For the most recent quarter, revenue in Nvidia’s data center business rose 427% from a year earlier to $22.6 billion, accounting for about 86% of the chipmaker’s total sales.

Founded in 1991, Nvidia spent its first few decades primarily as a hardware company that sold chips for gamers to run 3D titles. It’s also dabbled in cryptocurrency mining chips and cloud gaming subscriptions.

But over the past two years, Nvidia shares have skyrocketed as Wall Street came to recognize the company’s technology as the engine behind an explosion in AI that shows no signs of slowing. The rally has lifted co-founder and CEO Jensen Huang’s net worth to about $117 billion, making him the 11th wealthiest person in the world, according to Forbes.

Microsoft shares are up about 20% so far this year. The software giant has also been a major beneficiary of the AI boom, after it took a significant stake in OpenAI and integrated the startup’s AI models into its most important products, including Office and Windows. Microsoft is one of the biggest buyers of Nvidia’s graphics processing units (GPUs) for its Azure cloud service. The company just released a new generation of laptops that are designed to run its AI models, called Copilot+.

Nvidia is a newcomer to the title of most valuable U.S. company. For the past few years, Apple and Microsoft have been trading the title.

Nvidia’s ascent has been so rapid that the company has yet to be added to the Dow Jones Industrial Average, the stock benchmark of 30 of the most valuable U.S. companies. Alongside its earnings release last month, Nvidia announced a 10-for-1 stock split, which went into effect on June 7.

The split gives Nvidia a better shot at being added to the Dow, which is a price-weighted index, meaning that companies with higher stock prices — rather than market caps — have outsized influence on the benchmark.

https://www.cnbc.com/2024/06/18/nvi...rket-cap-is-most-valuable-public-company.html

 

[Octavian]

Someone should write a book about NVIDIA... it's actually an amazing and fascinating story between the different angles Jensen and team had to take over the years before humans realized that GPUs, which were designed to handle graphics for Call of Duty, are also amazing at processing large trees of data for LL AI models.

 

[nostradumbass]

The company's revenue last year was just under $45 billion, and they've added more than the gdp of Canada is just the last 6 months, and $1.5T in just 6 weeks.

 

[Rational Poster]

I've got an RTX 3080

 

[Cajun]

The company's revenue last year was just under $45 billion, and they've added more than the gdp of Canada is just the last 6 months, and $1.5T in just 6 weeks.

Crazy stuff. Thats capitalism imo.

 

[Scheme]

On my way to buy a 4080 Super right now

 

[nostradumbass]

Crazy stuff. Thats capitalism imo.

I guess good for NVDA, but I don't think it's a good thing to have our entire stock market propped up by a company that is completely reliant on Taiwan. I don't think they would anytime soon, but if China invaded Taiwan, we'd see a bigger market crash than 1929, and I can't say it's especially comforting to have our whole economy dependent of "nah, I don't think they would", when the best case scenario is that they don't, and instead the investment pays off by having AI robots replace millions of jobs.

 

[Cajun]

I guess good for NVDA, but I don't think it's a good thing to have our entire stock market propped up by a company that is completely reliant on Taiwan. I don't think they would anytime soon, but if China invaded Taiwan, we'd see a bigger market crash than 1929, and I can't say it's especially comforting to have our whole economy dependent of "nah, I don't think they would", when the best case scenario is that they don't, and instead the investment pays off by having AI robots replace millions of jobs.

Interesting take. I'm in the mind of "Nah, I dont think they would" haha but your point is valid. Guessing the manufacturing is done there?

 

[ObsoleteSoul]

Imagine how much more they could have grown if they avoided a "shortage" every damn generation of cards they release. Guess us master race folks can always get them at a markup, but man, same song and dance for the last decade or so.

 

[nostradumbass]

Interesting take. I'm in the mind of "Nah, I dont think they would" haha but your point is valid. Guessing the manufacturing is done there?

Yeah, the chips are from TSM. Any disruption there is some serious trouble.

 

[chardog]

wasnt it heavily funded by the public sector? Seeing how they were making big moves years back, I had a sizeable stake in the company, still do, one of my rare 5x's

 

[KaNesDeath]

Covid allowed them to increase retail prices to unacceptable levels from everyone transitioning to work from home and crypto miners. Current AI craze also has them pushing an ungodly amount of units.

Nvidia has been insanely greedy since 2020. Whats worse is Intel and AMD are matching Nvidias GPU pricing structure using performance standards. Asking two thousand dollars for their top of the line Pc gaming GPU is insufferable.