Nvidia Becomes World’s Most Valuable Company Amid AI Boom

Confidence UbaniJune 20, 20241 Mins read752

Nvidia, a key artificial intelligence (AI) sector player, has become the world’s most valuable company. On Tuesday, its market capitalisation soared to $3.34 trillion, surpassing Microsoft and Apple. According to BBC, the company’s share price closed at nearly $136, marking a 3.5% increase for the day.

This milestone is due to Nvidia’s dominance in the tech industry, particularly in the AI chip market. Analysts have dubbed these chips the “new gold or oil” of the tech sector.

Nvidia’s stock has seen a remarkable rise, nearly doubling in value since the start of the year. Over the past eight years, its stock price has skyrocketed from less than 1% of its current value. This growth trajectory has been fueled by the increasing demand for AI chips, especially those used in popular AI models like OpenAI’s ChatGPT. Additionally, Nvidia experienced a sales boom in 2020 due to a surge in Bitcoin mining.

Chris Penrose, Nvidia’s global head of business development for telecommunications, emphasised the impact of generative AI on various industries. He predicted further growth in the sector.

“The generative AI journey is really transforming businesses and telcos around the world. We’re just at the beginning,” he said.

Analysts from Wedbush Securities believe that Nvidia, Appl, and Microsoft will be central in the race to a $4 trillion market cap within the following year. However, some caution that Nvidia’s dominance may face challenges due to increasing competition and the need for its customers to monetise AI software effectively.