Nvidia dethrones Microsoft to become most-valued company

Jensen Huang-led U.S. semiconductor behemoth Nvidia Corporation has become the world's most valuable company, surpassing the likes of Microsoft and Apple, thanks to a strong demand for its chips from the world's leading tech companies.

Nvidia’s market capitalisation hit $3.335 trillion on Tuesday as shares surged 3.5% to $136.33 on Nasdaq. The stock is currently trading 30% down as compared to the 52-week high of $195.95. 

As the rally in the Nvidia stock continues, Wall Street analyst Susquehanna in its latest note has raised the target price on the stock from $145 to $160 per share, a potential 20% upside from the recent levels. This could take Nvidia's m-cap to a whole new level of $3.9 trillion.

The Santa Clara California-based company had recently eclipsed tech behemoth Apple to become the world's second most valued company, only second to Microsoft. Even as the share price of Nvidia continues to climb, Apple and Microsoft saw their share price skid by 1.1% and 0.45%, respectively, on Tuesday.

For the reference, Microsoft's m-cap stands at $3.31 trillion, while Apple's is at $3.28 trillion.

Shares of Nvidia, which has invested heavily in AI, have seen a major spike in recent times, rising 200.47%. In the year-to-date and six-month periods, the scrip has surged 181.46% and 173.35%, respectively. The Nvidia shares have gained 43.05% in the past month and 10.20% in the past week.

At the current m-cap, the company's valuation is larger than the GDPs of all but five of the world's biggest economies. According to 2023 GDP data from the World Bank, the countries whose GDP is bigger than the chipmaker's market cap are the US ($25.46 trillion), China ($17.96 trillion), Japan ($4.23 trillion), Germany ($4.07 trillion), India ($3.38 trillion). 

Driven by the recent rally, the market cap of Nvidia surpassed the economies of the UK ($3.07 trillion), France ($2.78 trillion), and Russia ($2.24 trillion). Nvidia's m-cap is larger than Canada, the 9th largest economy with a GDP of $2.14 trillion, and Italy ($2.01 trillion).

In Q1 of FY25, Nvidia reported revenue at $26 billion, up 18% from the previous quarter and up 262% from a year ago. For the quarter, GAAP earnings per diluted share was $5.98, up 21% QoQ and up 629% YoY. Non-GAAP earnings per diluted share stood at $6.12, up 19% from the previous quarter and up 461% from a year ago.

According to NVIDIA founder and CEO Jensen Huang’s recent take on the AI disruption, generative AI is reshaping industries and opening new opportunities for innovation and growth. “We’re at the cusp of a major shift in computing,” Huang said in Taipei recently. “The intersection of AI and accelerated computing is set to redefine the future.”