Nvidia Becomes World’s Most Valuable Company with $3.34 Trillion Market Cap

In a historic achievement, Nvidia has become the world’s most valuable company, boasting a market capitalisation of $3.34 trillion. This remarkable feat comes amid blockbuster earnings and growing investor enthusiasm over artificial intelligence (AI). Nvidia is now the 12th US company since 1925 to claim the top spot in market value.

Nvidia, now valued at $3.34 trillion, surpasses the GDP of all but six of the world’s largest economies: the US, China, Germany, Japan, India, and the UK.

Technological Innovation

Nvidia has succeeded through its graphics processing unit (GPU) innovations. Best known for transforming the gaming industry, Nvidia’s GPUs are now essential for AI development. These chips power systems like OpenAI’s ChatGPT, which is capable of generating text, images, and other media. Nvidia, established in 1993 by Jensen Huang, Chris Malachowsky, and Curtis Priem in Santa Clara, California, introduced its first graphics processor, the NV1, in 1995.

From 1999 to 2005, Nvidia led the gaming graphics market with its GeForce series, including the pioneering GeForce 256 GPU. It acquired competitor 3dfx during this time.

Between 2006 and 2012, Nvidia introduced CUDA for GPU-based computing and the Tesla GPU for high-performance tasks. A notable breakthrough was the Tegra processor in 2009, entering the mobile market. By 2013-2018, Nvidia shifted focus to AI and data centres, launching the Nvidia GRID for GPU virtualization and the Nvidia Drive platform for autonomous vehicles.

Since 2019, Nvidia has aggressively pursued AI and the metaverse while expanding its data centres. The Nvidia A100 Tensor Core GPU reaching a $1 trillion market cap in 2023 cemented its leadership. In 2023, data centre revenue surged by 35%, nearly 40% of Nvidia’s total revenue.

Strategic Acquisitions and Partnerships

Acquisitions have been key to Nvidia’s rise. The $40 billion acquisition of Arm Holdings in 2022 gave Nvidia a competitive edge with Arm’s chip designs widely used in mobile devices and IoT. Partnerships with tech giants like Google, Microsoft, and Amazon have also bolstered Nvidia’s market position.

Nvidia’s Financial Might

Nvidia’s financial performance is spectacular. As of June 19, 2024, its market capitalization of $3.34 trillion surpasses Apple, Microsoft, and Saudi Aramco. Nvidia’s stock has delivered over 400% returns to shareholders over three years, rising more than 170% this year and about 1,100% since October 2022.

Nvidia’s market value soared from $2 trillion to $3 trillion in just 96 days, compared to Microsoft’s 945 days and Apple’s 1,044 days, according to Bespoke Investment Group. Nvidia’s forward price-to-earnings ratio stands at 43, higher than the S&P 500’s 21 times earnings.