Nvidia passes Microsoft in market cap to become most valuable public company

🌈 Abstract

The article discusses Nvidia's rise to become the most valuable public company in the world, surpassing Microsoft and Apple. Nvidia's success is primarily attributed to its dominance in the AI chip market, which has seen a significant boom due to the rapid growth of generative AI technologies.

🙋 Q&A

[01] Nvidia's Rise to the Top

1. What factors contributed to Nvidia's rise to become the most valuable public company?

• Nvidia's shares have surged more than 170% so far this year, and have multiplied by more than ninefold since the end of 2022.
• This rise coincides with the emergence and growth of generative artificial intelligence, which has driven demand for Nvidia's AI chips used in data centers.
• Nvidia now has about 80% of the market for AI chips used in data centers, a business that has ballooned as major tech companies like OpenAI, Microsoft, Alphabet, Amazon, and Meta have raced to acquire the processors needed to build AI models and run large workloads.
• Nvidia's data center business revenue grew 427% year-over-year in the most recent quarter, accounting for about 86% of the company's total sales.

2. How does Nvidia's market cap compare to other tech giants?

• Nvidia's market cap reached $3.34 trillion, surpassing Microsoft's $3.32 trillion and making it the most valuable public company in the world.
• Nvidia also briefly surpassed Apple as the most valuable company, though Apple's market cap is now $3.29 trillion.
• Nvidia is a newcomer to the title of most valuable U.S. company, as Apple and Microsoft have traded the title in recent years.

3. How has Nvidia's stock split affected its potential inclusion in the Dow Jones Industrial Average?

• Nvidia announced a 10-for-1 stock split, which went into effect in June 2023.
• The stock split gives Nvidia a better shot at being added to the Dow Jones Industrial Average, which is a price-weighted index where companies with higher stock prices have more influence.

[02] Nvidia's Transformation

1. How has Nvidia's business evolved over time?

• Nvidia was initially known primarily as a hardware company that sold chips for gamers to run 3D titles.
• Over the past two years, Nvidia has transformed into a key player in the AI market, with its technology powering the explosion in generative AI.
• This shift has led to a massive surge in Nvidia's stock price and the recognition of the company's importance in the AI revolution.

2. How has Nvidia's co-founder and CEO benefited from the company's success?

• Nvidia co-founder and CEO Jensen Huang's net worth has grown to about $117 billion, making him the 11th wealthiest person in the world according to Forbes.
• Huang's wealth has increased significantly due to the rapid rise in Nvidia's stock price, which has been driven by the company's dominance in the AI chip market.