Semiconductor behemoth Nvidia Corp has leapfrogged Microsoft (NASDAQ:MSFT) Ltd to become the world's most valuable public company.
Three trillion threshold crossed
As of Tuesday, Nvidia's market capitalisation soared to $3.34 trillion, overtaking Microsoft's $3.32 trillion – a historic achievement for Nvidia, which crossed the $3 trillion threshold earlier this month.
Nvidia's shares have surged more than ninefold since the end of 2022, largely driven by the company's pivotal role in the burgeoning field of generative artificial intelligence (AI).
The stock is up more than 170% this year alone, bolstered by strong first-quarter earnings reported in May.
Nvidia now commands around 80% of the AI chip market for data centres, with revenue from this segment climbing 427% year-on-year to $22.6 billion, accounting for 86% of its total sales.
From gamers to generative AI
Originally founded in 1991, Nvidia initially catered to the gaming community with its graphics chips.
Over the years, it expanded its offerings to include cryptocurrency mining chips and cloud gaming subscriptions.
The past two years have seen Nvidia's shares skyrocket as its technology became essential for AI development, drawing attention on Wall Street.
This rapid ascent has boosted the net worth of Nvidia's co-founder and CEO Jensen Huang, now estimated at $117 billion, making him the 11th wealthiest person globally according to Forbes.
Microsoft a key purchaser
But Microsoft is hardly a loser in this race, having also benefited from the AI boom. The company has made big investments in OpenAI and the integration of AI models into its core products like Office and Windows.
It also continues to be one of the largest purchasers of Nvidia's graphics processing units (GPUs) for its Azure cloud service.
Despite Nvidia's meteoric rise, the company has yet to be included in the Dow Jones Industrial Average, the benchmark of 30 of the most valuable US companies.
The megacap’s recent 10-for-1 stock split, effective June 7, may enhance its prospects of being added to the prestigious price-weighted index.