Key Points:
- Nvidia’s market cap surpassed $3 trillion, making it the 2nd-largest public company after Microsoft. Its stock has soared by over 3,224% in the past 5 years.
- Nvidia reported first-quarter sales of $26 billion, more than triple from a year ago, and forecasts $28 billion for the current quarter.
- Major tech companies are investing billions in Nvidia’s GPUs for AI development. To increase stock accessibility, Nvidia announced a 10-for-1 stock split.
- Nvidia reached a $3 trillion market cap just three months after surpassing $2 trillion in February 2024.
Nvidia’s shares closed up 5% to $1,224.40 on Wednesday, propelling the company’s market capitalization above $3 trillion for the first time. This milestone makes Nvidia the second-largest public company globally, trailing only Microsoft and surpassing Apple.
This remarkable achievement marks the latest highlight in Nvidia’s astonishing five-year run, which has seen its stock soar by more than 3,224%. Nvidia’s extraordinary growth has been fueled by the burgeoning demand for generative artificial intelligence, a sector where Nvidia’s powerful graphics processing units (GPUs) are essential.
Nvidia’s rapid ascent in market value is a testament to the increasing reliance on AI technologies across various industries. The company reported first-quarter earnings in May, underscoring the relentless demand for its GPUs. Nvidia’s sales for the quarter reached $26 billion, more than triple the revenue generated in the same period the previous year. The company also exceeded Wall Street’s expectations for sales and earnings and forecasted revenue of approximately $28 billion for the current quarter.
The surge in Nvidia’s stock is driven by the tech industry’s need for advanced GPUs to develop and deploy large AI models, such as those used by OpenAI’s ChatGPT. Major tech companies like Google, Microsoft, Meta, Amazon, and OpenAI are investing billions of dollars in Nvidia’s chips, underscoring their critical role in the AI boom.
Nvidia’s market cap milestone is a financial achievement and reflects its pivotal role in the tech industry. Founded in 1993, Nvidia reached a $2 trillion valuation in February 2024 and crossed the $3 trillion mark in just three months. The company’s rapid valuation growth mirrors the accelerating adoption of AI technologies and the increasing complexity of AI models, which demand more powerful and efficient computing solutions.
In addition to its financial performance, Nvidia announced a 10-for-1 stock split later this month, aiming to make its shares more accessible to a broader range of investors. This move will likely further boost investor interest and support the company’s stock price.
Nvidia’s journey mirrors other tech giants who have crossed the $3 trillion mark. Apple was the first U.S. company to reach this milestone during intraday trading in January 2022, followed by Microsoft in January 2024.
Nvidia’s achievement highlights the growing importance of AI and advanced computing in driving market value and innovation in the tech industry. As Nvidia continues to lead the way in AI technology, its market position and influence are expected to grow even further, reinforcing its status as a critical player in the global tech landscape.
