Nvidia topped the list of the most valuable companies in the world yesterday, Tuesday, displacing the giant Microsoft from first place, as the advanced processors produced by Nvidia now occupy a pivotal position in the race to dominate artificial intelligence technologies, according to Reuters.
Tuesday’s gains pushed Nvidia’s stock to a new record high and added more than $110 billion to its market value, equivalent to the entire value of Lockheed Martin.
The company’s shares rose by 3.5%, bringing the share price to $135.58, bringing its total market value to $3.335 trillion, just a few days after it surpassed Apple to occupy second place on the list.
Microsoft’s market value reached $3.317 trillion, with its shares declining by 0.45%. Apple shares fell by more than 1%, bringing the company’s value to $3.286 trillion.
Nvidia market
Over the past year, the massive rise in Nvidia’s market value has become a symbol of the dizzying bull run on Wall Street, a result of investors’ optimism about promising artificial intelligence technologies.
While the rise in the value of Nvidia shares has pushed the S&P 500 and Nasdaq indices to record levels, some investors are concerned that this excessive optimism about artificial intelligence will evaporate if there are signs of a slowdown in spending in this industry.
NVIDIA has also become the most traded company on Wall Street, with average daily trading volume recently reaching $50 billion, compared to about $10 billion each for Apple, Microsoft and Tesla, according to data from the London Stock Exchange Group. The chip maker now accounts for about 16% of the total trading witnessed by S&P 500 companies.
“It’s Nvidia’s market, and we’re all trading within it,” Steve Sosnick, head of market strategy at Interactive Brokers, told Reuters.
Artificial intelligence processors
NVIDIA’s stock has nearly tripled this year so far, compared to Microsoft’s stock rise of about 19%, as the volume of demand for its advanced processors exceeds the volume of supply of those processors.
Giant technology companies such as Microsoft, Meta, and Alphabet, which owns Google, are competing to develop their artificial intelligence-based computing capabilities and integrate these technologies into their various products and services.
The increasing demand for artificial intelligence processors produced by Nvidia, which are superior to competitors’ processors, has caused a decrease in the supply of these processors in the market, and thus many investors see that Nvidia is the biggest beneficiary so far of the increasing development in the field of artificial intelligence.
Nvidia executives said in May that demand for Blackwell AI processing chips could exceed supply until next year.
The company’s market value rose from $1 trillion to $2 trillion in just 9 months in February, while it took a little more than 3 months to reach a market value of $3 trillion in June.
