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Nvidia Becomes World’s Most Valuable Company Amid AI Boom

Nvidia Becomes World’s Most Valuable Company Amid AI Boom

Nvidia has skyrocketed to become the world’s most valuable company, highlighting the crucial role artificial intelligence is expected to play in the global economy.

The company’s shares surged by 3.5% on Tuesday, elevating its market value to around $3.34 trillion. This leap pushed Nvidia past tech giants Microsoft and Apple, which had been vying for the top spot.

The driving force behind Nvidia’s impressive market value is the high demand for its chips, considered the benchmark in the AI industry. This year alone, Nvidia’s shares have soared over 170%, and since their low in October 2022, they’ve climbed approximately 1,100%.

Exceptional earnings and growing investor interest in AI have further fueled Nvidia’s stock rally. Remarkably, it took Nvidia just 96 days to leap from a $2 trillion to a $3 trillion market cap, while Microsoft and Apple took significantly longer.

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Since 1925, only 11 U.S. companies have reached the top spot in market value on a closing basis, notes Howard Silverblatt, a senior index analyst at S&P Dow Jones Indices. While companies like Microsoft have previously held the top position and experienced fluctuating fortunes, Nvidia’s current performance is impressive.

Its revenue more than tripled to $26 billion in the latest quarter, with net income jumping seven-fold to $14.9 billion. Revenue for this fiscal year is projected to nearly double to $120 billion, with a further 33% increase expected in fiscal 2026.

Despite the surge in its share price, Nvidia’s stock valuation appears moderate by some measures. Its forward price-to-earnings ratio stands at 43, higher than the 25 level at the start of the year but lower than much of last year. By comparison, the S&P 500 trades at 21 times earnings.

Nvidia is not alone in benefiting from the AI hype. Other tech companies like Super Micro Computer and Arm Holdings have also seen significant stock increases this year.

Alexander Stefanov

Reporter at CoinsPress

Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.

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