Nvidia, once known for its graphics chips in the gaming community, has now become the most valuable public company in the world. With shares climbing 3.2% in midday trading, the chipmaker’s market cap has reached an impressive $3.33 trillion, surpassing both Microsoft and Apple. This surge in value has been driven by Nvidia’s success in the artificial intelligence (AI) market, as the company has approximately 80% market share in AI chips used in data centers.
As companies like OpenAI, Microsoft, Alphabet, Amazon, and Meta race to build AI models and handle large workloads, Nvidia has positioned itself as a key player in the industry. Nvidia’s revenue in the data center business rose by a staggering 427% from the previous year, reaching $22.6 billion and accounting for 86% of the company’s total sales. This growth comes at a time when the demand for AI technology is at an all-time high, with no signs of slowing down.
Nvidia’s co-founder and CEO, Jensen Huang, has seen his net worth skyrocket to approximately $117 billion, making him the 11th wealthiest person in the world. Over the past two years, Nvidia’s shares have soared as Wall Street recognizes the company’s technology as a driving force behind the AI revolution. Despite being founded in 1991 as a hardware company for gamers, Nvidia has managed to pivot and capitalize on the AI boom.
While Nvidia leads the way in AI chips, Microsoft has also benefited significantly from the AI boom. The software giant has integrated AI models from OpenAI into its most important products, such as Office and Windows. Microsoft is also one of the largest buyers of Nvidia’s graphics processing units (GPUs) for its Azure cloud service. Both companies have seen substantial growth in their market cap this year, with Microsoft up 20%.
In an effort to increase its chances of being added to the Dow Jones Industrial Average, Nvidia announced a 10-for-1 stock split, which took effect on June 7. The split aims to give Nvidia a competitive edge, as the Dow is a price-weighted index where companies with higher stock prices hold more influence. Despite its rapid ascent to becoming the most valuable U.S. company, Nvidia has yet to be added to the prestigious index.
Nvidia’s evolution from a niche gaming chip company to a dominant player in the AI market is a testament to the company’s ability to adapt and innovate. With its market cap surpassing industry giants like Microsoft and Apple, Nvidia’s future looks promising as it continues to lead the way in AI technology.
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