Nvidia surpasses Apple and Microsoft to become the most valuable company on earth

Nvidia achieved a historical point in its own history on Thursday, 3 July, by reaching a market valuation of $3.92 trillion, and becoming the most valued company in history. This surpasses Apple’s prior record of $3.915 billion set in 2024. 

Wall Street is unrelentingly optimistic about artificial intelligence, which drove the share price of the chipmaker up by 2.4% to $160.98 during morning trading.

Nvidia’s meteoric rise was fueled by the soaring demand of its high-end AI chip, which has become crucial for training advanced AI model. According to LSEG, the company’s total market capitalisation is now greater than the combined value for the Canadian and Mexican stock exchanges and the value of all publicly-listed companies in the United Kingdom.

Nvidia stocks are considered the best investment.

“When the first firm crossed a billion dollars, it’s amazing.” Joe Saluzzi is the co-manager for trading at Themis Trading. “Four trillion dollars? That’s incredible,” he said. It tells you there’s an AI rush, and everyone is chasing it at the moment.

Nvidia has grown from a niche video game graphics company co-founded by Jensen Huang in 1993 to become the industry leader in AI. The stock price has increased by almost eight times since 2021 when the market value of Nvidia was $500 billion. The company now holds a 7.4 per cent weight in the S&P 500 index, undeniably claiming its dominance.

The rally follows an eventful first half of the calendar year when the markets were roiled by concerns over President Donald Trump’s global trade announcements, as well as the ongoing trade dispute with Beijing. The January sell-off, which was a reaction to Chinese startup DeepSeek’s low-cost AI system outperforming Western competitors raised fears of a reduction in spending on high-end processing. Nvidia stock, however, has recently risen 68 percent from its April 4, 2014 dip. This is due to expectations of a softer trade policy.

Nvidia chips are used by many tech companies, making it the most valuable of all.

Nvidia’s valuation is backed by strong earnings growth. The stock trades at 32x analysts’ earnings expectations for the next twelve months. The chips are used to power AI data centres by tech giants such as Microsoft, Amazon Meta Platforms Alphabet (Google), Tesla and Alphabet.

Microsoft now ranks second in terms of market capitalization, at $3.7 trillion. Apple is ranked third, at $3.19 trillion. Nvidia’s growth also shows a shift in the semiconductor sector, since it replaced Intel (which was struggling) in the Dow Jones Industrial Average by November 2024.