6/6/2024–|Last updated: 6/6/202402:34 PM (Mecca time)
The market value of the American chip maker Nvidia exceeded $3 trillion for the first time ever, with the close of trading yesterday. Nvidia has surpassed Apple, the manufacturer of iPhone phones, and is now in second place after Microsoft.
The Santa Clara, California-based company’s stock has risen nearly 147% this year, adding about $1.8 trillion with a surge in insatiable demand for its chips used to power artificial intelligence applications.
Yesterday, the stock rose 5.2% to close at a record level of $1,224.40, pushing the market value to more than $3 trillion and surpassing Apple in the process.
Stock split
The rise came before the company’s stock split into 10 shares after the market closed Friday, a move announced May 22 as part of its quarterly earnings report.
Trading in the shares will begin at their new price after the split next Monday.
This means that Nvidia stockholders will receive 9 additional shares for every share they owned before the split, which will reduce the value of each share to one tenth of its previous value.
The division will reduce the price of Nvidia shares from a price of approximately $1,200 last Monday to about $120.
The last time Nvidia’s value was higher than Apple was in 2002, 5 years before the launch of the first iPhone, and at that time, the value of the two companies was less than $10 billion each.
NVIDIA was already the most valuable semiconductor company in the world, and now, it has become the first computer chip company to reach a market value of $3 trillion.
The emergence of generative AI is a new industrial revolution, and NVIDIA expects it to play a major role as the technology shifts to personal computers, CEO Jensen Huang said earlier in a keynote speech at National Taiwan University.
Radical change
Bloomberg quoted Angelo Zino, chief equity analyst at CFRA Research, as saying: “We see this radical change as in the very early innings.”
After the CEO keynote, Zeno said he likes the “improved visibility” and sees “more momentum on the GPU/CPU/networking side driving upside to consensus estimates.”
Bloomberg reported that the company was the largest beneficiary of the massive influx of spending on artificial intelligence, which helped it enter a race to claim the title as the most valuable company in the world.
The chip manufacturer still lags behind Microsoft in terms of market value, but with shares falling, the American newspaper The Wall Street Journal believes that it is only a matter of time before Nvidia overtakes it.
Apple shares are facing pressure this year due to concerns about slowing demand for iPhones in China and a fine from the European Union, and its shares recently turned positive for 2024 as investor sentiment towards the iPhone maker slowly improves.
The world’s largest companies
According to Forbes, the ranking of the largest companies in the world by market value is as follows:
- Microsoft: $3.151 trillion.
- Nvidia $3.012 trillion.
- Apple: $3.003 trillion.
- Alphabet (which owns Google) $2.179 trillion.
- Amazon: $1.886 trillion.
- Aramco (Saudi Arabia) $1.820 trillion.
