NVIDIA Surpasses Apple to Become Second Largest Company by Market Value
The American chip maker NVIDIA has made history by surpassing Apple, the manufacturer of iPhone phones, to become the second largest company in the world by market value, trailing only Microsoft. This remarkable achievement comes after NVIDIA's market value exceeded $3 trillion for the first time.
Based in Santa Clara, California, NVIDIA's stock has surged almost 147% this year, driven by insatiable demand for its chips, which are crucial for powering artificial intelligence applications. The stock rose 5.2% recently, closing at a record high of $1,224.40, thereby pushing its market value past the $3 trillion mark.
The company announced a stock split, dividing each current share into 10 shares, effective after the market closed on Friday. This move aims to make the shares more accessible by reducing the price of each share to one-tenth of its previous value. Trading at the new price began the following Monday.
NVIDIA's rise is largely attributed to the booming field of generative AI, with CEO Jensen Huang stating that this technology shift is akin to a new industrial revolution. Huang emphasized that NVIDIA expects to play a major role as the technology transitions to personal computers.
The company's success in the AI market significantly boosted its revenue. In the first quarter of the fiscal year 2025, data center revenue soared to $22.56 billion, up from $4.28 billion in the corresponding quarter last year, marking a 262% increase. This dramatic growth underscores NVIDIA’s dominant position, having captured about 80% of the AI chip market.
NVIDIA's GPUs have become indispensable for machine learning, large language model (LLM) training, and supercomputing capabilities. High-profile clients, including major technology companies and influential figures like Tesla's Elon Musk, have leaned heavily on NVIDIA's advanced technologies.
Despite NVIDIA's meteoric rise, it still trails behind Microsoft in terms of market value. However, analysts and financial experts believe it is only a matter of time before NVIDIA climbs to the top spot. Apple has faced its own set of challenges, including concerns over slowing iPhone demand in China and a significant fine from the European Union, which have pressured its market value.
According to Forbes, the current ranking of the largest companies by market value is: Microsoft ($3.151 trillion), NVIDIA ($3.012 trillion), Apple ($3.003 trillion), Alphabet ($2.179 trillion), Amazon ($1.886 trillion), and Aramco ($1.820 trillion).
- Interest in artificial intelligence has significantly boosted the fortunes of NVIDIA, contributing to a surge in the S&P 500 and Nasdaq. The company's focus on advanced technologies such as machine learning and supercomputers has placed it at the forefront of innovation.
- NVIDIA has a rich history dating back to the late 1990s when it initially catered to hardware enthusiasts, gamers, and 3D designers with its video cards. Today, its processors and software extend beyond AI into robotics, autonomous vehicles, and other computation-intensive applications.
- Though NVIDIA is the largest player in the AI chip market, competitors and startups are emerging, aiming to capture a piece of this lucrative sector. Nevertheless, NVIDIA's robust revenue growth and technological advancements have kept it ahead of the curve.
