AI boost Nvidia to be the most valuable company

Nvidia has become the world’s most valuable company following a staggering rally in its shares, underlining the outsized role investors expect artificial intelligence to play in the global economy over coming years.

Its shares rose 3.5% on Tuesday, giving it a market value of about US$3.34 trillion. That pushed the semiconductor bellwether past Microsoft and Apple which had been jostling for the top spots in recent days.

The surge in Nvidia’s market value has been driven by demand for its chips, which are the gold standard in the AI space. The company’s shares are up more than 170% this year and have risen about 1,100% since their October 2022 low, Reuters reported.

Blockbuster earnings and broadening investor enthusiasm over AI are supercharging Nvidia’s rally. That fervor has been reflected in Nvidia’s market value, which took only 96 days to go from US$2 trillion to US$3 trillion.

Microsoft, one of the two other companies to reach those rarefied levels, took 945 days to go from US$2 trillion to US$3 trillion while Apple took 1,044 days to make the leap, according to Bespoke Investment Group.

Previously, just 11 U.S. companies since 1925 have reached the top spot in market value on a closing basis, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

Fortunes have diverged for past holders of the top position in recent decades. Microsoft reached No. 1 in the late 1990s but then its shares struggled for years during the early 2000s following the dotcom bubble, only to come roaring back in the latter half of the last decade.