Nvidia takes the top spot as the world’s highest valued company
Nvidia ascended to become the world’s most highest valuable company after its stock surged to a record high on Tuesday. The closing price of nearly $136 marked a 3.5% increase, surpassing Microsoft in market value and having previously overtaken Apple earlier in the month.
Nvidia, an American company known for producing computer chips crucial for AI software, has experienced robust sales and profit growth in recent years due to heightened demand for its products. Investors have driven up its share price on expectations of further earnings expansion, although concerns linger about its lofty valuation.
The company’s market capitalization now stands at $3.34 trillion (£2.63 trillion), nearly doubling since the beginning of the year from its price eight years ago, which was less than 1% of its current value.
Amid intense competition among AI developers such as Microsoft, Google’s Alphabet, Meta, and Apple, Nvidia has maintained a dominant position in the AI chip market. This competitive advantage has bolstered investor confidence in its future growth prospects, with Nvidia consistently exceeding analyst forecasts for sales and profits.
Following its latest financial results in May, technology analyst Ben Barringer from Quilter Cheviot remarked that Nvidia had once again surpassed high expectations, emphasizing ongoing strong demand. However, skepticism remains among some analysts has cautioned about Nvidia’s ability to sustain its market share amidst growing competition and uncertainties over AI software monetisation by its customers.