Nvidia hits $US3 trillion market cap, passes Apple in total value

The maker of artificial-intelligence chips became the third company ever to reach the milestone. Its stock has more than doubled this year.

Nvidia’s chips play a central role in powering artificial intelligence, which is threatening to disrupt virtually every major industry.

Nvidia’s valuation surpassed $US3 trillion ($4.5 trillion) on Wednesday night, with the maker of prized artificial-intelligence chips becoming the third company ever to reach the milestone.

The achievement extends the meteoric rise for Nvidia’s stock price, which has more than doubled so far this year after more than tripling in 2023. The company added its latest trillion dollars in valuation in about three months.

The steep and unprecedented rise is powered by the role Nvidia’s chips play in powering artificial intelligence, which is threatening to disrupt virtually every major industry. Chief Executive Jensen Huang recently declared the beginning of a new industrial revolution where Nvidia was helping turn $US1 trillion of data centres into “AI factories.”

Shares of Nvidia rose 5.2 per cent to $US1224.40, valuing the company at around $US3.011 trillion, according to FactSet.

That total puts the company just above Apple, which closed right around $US3.003 trillion in market value, and behind only Microsoft. The last time Nvidia’s value eclipsed Apple’s was in March 2002.

Apple became the first $US3 trillion company last year. Microsoft passed Apple earlier this year and became the second member of the club.

Nvidia’s chips, worth tens of thousands of dollars each, have become a scarce, treasured commodity like Silicon Valley has seldom seen. The company is estimated to have more than 80 per cent of the AI chip market.

In March, Nvidia detailed its next generation of AI chips, the successors to the wildly successful H100.

The new chips, code-named Blackwell, are much faster and larger than their predecessors. The company recently said shipments would start in the second quarter ahead of them being in operation in the fourth quarter. Those chips would bring in “a lot” of revenue this year, Huang said on the company earning conference call.

“We don’t see anyone challenging Nvidia’s margin in a major way for the next two years given prospects for the Blackwell” and the company’s following chip, Vera Rubin, wrote Melius Research analyst Ben Reitzes in a note to clients.

Nvidia crossed the $US1 trillion mark last summer and moved above $US2 trillion in February.

The company plans to split its stock 10-for-1, effective June 7. The split won’t impact its total valuation. The company also is increasing its dividend to 10 cents a share from US4c, based on the current share count. The dividend will be a penny a share after the split.

The Wall Street Journal

Nvidia CEO Jensen Huang speaks during Computex in Taipei on June 4, 2024. Photo by I-Hwa Cheng / AFP.