Nvidia becomes world’s most valuable company as AI rally steams ahead

Nvidia Corp’s relentless rally has propelled the semiconductor giant’s market capitalisation over its mega-cap tech peers, helping it clinch the title of the world’s most valuable company as the artificial intelligence wave continues.

Shares rose as much as 3.4 per cent to about US$3.3 trillion on Tuesday, catapulting it over Microsoft Corp. and Apple Inc. The top stocks have jockeyed all month for the pole position, with Nvidia edging past its big-tech peers.

Earlier in the month, Nvidia capped Apple by market value for the first time since 2002, and the two went back and forth in rankings in recent days. Last week, Apple also overtook Microsoft to trade in the top spot briefly.

The ranking is yet another reminder that AI is the top focus of many investors. Nvidia is seen as the biggest and earliest beneficiary of the technology as it dominates the market with its highly sought-after chips that help power data centres running complex computing tasks required by AI applications.

Demand for its H100 accelerators are surging and helped drive the chipmaker’s sales up by more than 125 per cent last year.

Microsoft, for its part, is also seen as an early AI winner given its investment and partnership with OpenAI, which created ChatGPT. And, this week, Apple shares rallied after the iPhone maker finally unveiled its plan for using the technology, appeasing investors at long last.

“We believe over the next year the race to US$4 trillion market cap in tech will be front and centre between Nvidia, Apple and Microsoft,” Daniel Ives analyst at Wedbush Securities wrote in a note.

Investors and Nvidia Chief Executive Officer Jensen Huang argue that Nvidia is more than a chip maker.

“They’re not just selling chips, they’re selling systems,” Michael Lippert, vice-president and portfolio manager at the Baron Capital, said in an interview, pointing to the company’s proprietary software and development ecosystem.

Nvidia’s swift climb to the top has been record breaking, as the company is one of the few firms to have shown significant revenue growth from AI. Through last close, shares have risen more than 160 per cent in 2024, adding more than US$2 trillion to its market capitalisation.

“Nvidia’s GPU chips are in essence the new gold or oil in the tech sector as more enterprises and consumers quickly head down this path with the Fourth Industrial Revolution well under way,” Ives said.