How Nvidia Became The World's Most Valuable Tech Company?

These days, it's hard to find someone who hasn't heard of Apple or Microsoft tech company. In comparison, Nvidia is somewhat less well-known. Those who familiar with computer hardware, gaming, and graphics cards know Nvidia well, but the general public is less acquainted.

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However, this situation is likely to change rapidly in the near future. Just like Apple and Microsoft, Nvidia's name is set to become widely recognized. Evidence of this shift is already visible. On Tuesday, June 18, Nvidia surpassed Apple and Microsoft to become the world's most valuable company.

⦿ A Brief Overview of Nvidia

Founded in 1993 by Taiwanese-born technologist Jensen Huang, Nvidia started as a computer chip manufacturer. The company later became known for producing chips used in graphics-intensive video games.

Recently, researchers have begun using these same chips for AI laboratories and AI algorithm processing. This shift has significantly increased the demand for Nvidia's chips, and investor interest in the company has surged.

Analysts have dubbed chips used in AI-driven devices as the "New Gold or Oil" of the tech sector.

⦿ How Nvidia Grip to the Top

This year, Nvidia has been one of the best-performing companies on the U.S. SandP index.

Five years ago, the California-based company's stock price was only $3.79. It has now risen to $136, representing an increase of nearly 3,500% over five years.

In the past 12 months alone, the company's stock has risen by 209%, and in the last six months, it has increased by 181%. By comparison, Microsoft's and Apple's stock prices have risen by 20.3% and 15.4%, respectively, this year.

Earlier this month, Nvidia surpassed Apple in market value. On Tuesday, its share price rose 3.5% to reach $136, making it more valuable than tech giant Microsoft.

Currently, Nvidia's market value stands at $334 billion, nearly double what it was at the beginning of the year. In contrast, Microsoft's current market value is $332 billion, and Apple's is $329 billion.

⦿ Jensen Huang Joins the Ranks of the Wealthiest

Alongside Nvidia's rise, the wealth of its co-founder and CEO, Jensen Huang, has soared.

According to the Bloomberg Billionaires Index, Huang's wealth has increased by approximately $75 billion since the beginning of the year. With a current net worth of $119 billion, he ranks 12th among the world's richest individuals.

⦿ Not Just a Success Story

Despite competitive and changing market conditions, analysts believe Nvidia's strong performance will continue.

The company has stated that it expects to earn $28 billion in profit in the quarter ending in July. In the quarter that ended in April, Nvidia earned $26 billion in profit, which is an 18% increase from the previous quarter and a 262% increase year-over-year.

During this period, their net income growth rate was 628%, or $14.9 billion.

⦿ Aiming for a $4 Trillion Market Cap.

Following its rise to the top as the world's most valuable company, Nvidia's global head of telecommunications business, Chris Penrose, announced that they are working to enhance their production and technologies further.

Speaking at an event in Copenhagen, he said, "The journey of generative AI is truly transforming businesses and telecommunications worldwide. We are in the early stages of this transformation."

Private banking firm Wedbush Securities stated in a note, "We believe the competition for a $4 trillion market cap in the tech industry will be centered around Nvidia, Apple, and Microsoft in the coming year."

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