Nvidia’s market valuation has soared past $3 trillion (£2.3 trillion), catapulting the chipmaker ahead of Apple to become the world’s second most valuable publicly traded company.
On Wednesday, the firm’s share price climbed over 5%, reaching more than $1,224.
This remarkable ascent began last year, driven by speculation that Nvidia is poised to benefit significantly from the burgeoning investment in artificial intelligence (AI).
Nvidia’s market value is now second only to Microsoft, which is also heavily invested in the AI industry through its support of OpenAI, the creator of ChatGPT.
In February, Nvidia was valued at $2 trillion.
However, a surge in share purchases followed the company’s announcement of a planned stock split, which is expected to occur on Friday.
This stock split will increase the number of shares by a factor of 10, thereby reducing their individual value and making them more accessible to smaller investors.
The move is anticipated to further boost demand for Nvidia’s stock.
Founded in 1993, Nvidia initially specialized in creating graphics processing units (GPUs) for computer games.
Even before the AI revolution, Nvidia began integrating features into its chips that support machine learning, which has helped the company expand its market share.
Now, Nvidia is viewed as a pivotal player in the spread of AI-powered technology across various industries. CEO Jensen Huang has declared this shift as the dawn of the “next industrial revolution.”
Nvidia’s explosive growth is evident in its recent financial performance.
The company reported $26 billion in sales for the three months ending April 28, more than triple the same period in 2023, and an 18% increase from the previous quarter.
The enthusiasm surrounding AI has contributed to a broader market rally over the past year, pushing the S&P 500 and the Nasdaq in the United States to new heights on Wednesday.
Earlier this year, Apple appeared to be lagging as its sales growth slowed.
However, recent optimism about its AI strategy has lifted its shares.
On Wednesday, Apple’s shares rose by 0.7%, giving it a market capitalization of approximately $3 trillion, which is generally calculated by multiplying the number of shares in a company by its current share price.
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