Nvidia set to become world's most valuable company in history
Shares of the leading designer of high-end AI chips were up 2.2 per cent at US$160.6 in morning trading, giving the company a higher market capitalisation than Apple's record closing value of US$3.915 trillion on Dec 26, 2024.
Nvidia's newest chips have made gains in training the largest artificial-intelligence models, fuelling demand for products by the Santa Clara, California, company. Microsoft is currently the second-most valuable company on Wall Street, with a market capitalisation of US$3.7 trillion as its shares rose 1.5 per cent to US$498.5. Apple rose 0.8 per cent, giving it a market value of US$3.19 trillion, in third place.
A race among Microsoft, Amazon.com, Meta Platforms, Alphabet and Tesla to build AI data centres and dominate the emerging technology has fuelled insatiable demand for Nvidia's high-end processors.
'When the first company crossed a trillion US dollars, it was amazing. And now you're talking four trillion, which is just incredible. It tells you that there's this huge rush with AI spending and everybody's chasing it right now,' said Joe Saluzzi, co-manager of trading at Themis Trading.
The stock market value of Nvidia, whose core technology was developed to power video games, has increased nearly eight-fold over the past four years, from US$500 billion in 2021.
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Nvidia is now worth more than the combined value of the Canadian and Mexican stock markets, according to LSEG data. The tech company also exceeds the total value of all publicly listed companies in the United Kingdom.
Nvidia recently traded at about 32 times analysts' expected earnings for the next 12 months, below its average of about 41 over the past five years, according to LSEG data. That relatively modest price-to-earnings valuation reflects steadily increasing earnings estimates that have outpaced Nvidia's sizable stock gains. The company's stock has now rebounded more than 68 per cent from its recent closing low on Apr 4, when Wall Street was reeling from President Donald Trump's global tariff announcements. US stocks, including Nvidia, have recovered on expectations that the White House will cement trade deals to soften Trump's tariffs. Nvidia holds a weight of nearly 7.4 per cent on the benchmark S&P 500 .
AI poster child
Nvidia's swelling market capitalisation underscores Wall Street's big bets on the proliferation of generative AI technology, with the chipmaker's hardware serving as the foundation.
Co-founded in 1993 by CEO Jensen Huang, Nvidia has evolved from a niche company popular among video game enthusiasts into Wall Street's barometre for the AI industry.
The stock's recent rally comes after a slow first half of the year, when investor optimism about AI took a back seat to worries about tariffs and Trump's trade dispute with Beijing. Chinese startup DeepSeek in January triggered a sell-off in global equities markets with a cut-price AI model that outperformed many Western competitors and sparked speculation that companies might spend less on high-end processors.
In November of last year, Nvidia took over the spot on the Dow Jones Industrial Average formerly occupied by chipmaker Intel, reflecting a major shift in the semiconductor industry towards AI-linked development and the graphics processing hardware pioneered by Nvidia. REUTERS
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