Nvidia, led by Jensen Huang, has become the most valuable company in the world, surpassing both Apple and Microsoft. On Thursday, Nvidia briefly reached a record market valuation of USD 3.92 trillion before closing at USD 3.89 trillion, staying ahead of Microsoft and Apple.
Nvidia beats Apple’s record
Nvidia’s valuation briefly crossed USD 3.915 trillion, overtaking the record Apple had set on December 26, 2024. It took Nvidia just over six months to break that record. Microsoft is now the second most valuable company with a USD 3.7 trillion valuation, while Apple is third with USD 3.19 trillion.
Why did Nvidia become so valuable?
According to Reuters, Nvidia’s meteoric rise is driven by Wall Street’s confidence that AI technology will continue growing rapidly. Nvidia produces powerful chips essential for AI, which has made investors highly optimistic about its future prospects.
As Nvidia’s stock and other big tech stocks rise, retirement savers investing in S&P 500 index funds are now heavily exposed to the future of AI.
How Nvidia is leading the AI race
Major tech companies like Google, Microsoft, Meta, Tesla, and Amazon are racing to build advanced AI data centers, which in turn boosts Nvidia, as more companies require its specialized chips to power their AI technologies.
Currently, Nvidia accounts for about 7% of the S&P 500 index. Combined, Nvidia, Microsoft, Apple, Amazon, and Alphabet make up around 28% of the index.
Nvidia’s value surpasses some countries’ stock markets
Nvidia is now worth more than the entire stock markets of Canada and Mexico combined, according to Reuters data. It’s also valued higher than all publicly listed companies in the UK.
The recent surge in Nvidia’s stock comes after a slow start to the year, when investors were more concerned about tariffs and trade tensions with China than about AI growth.