Nvidia overtakes Microsoft to become the world’s most valuable company

The company had already overtaken Apple in valuation earlier this month.

Nvidia is one of the key makers of computer chips required to power artificial intelligence (AI) software, a technology which has exploded in popularity in recent years thanks to the emergence of generative AI products such as ChatGPT, and the rush to adopt the technology in order to keep up with the sector’s latest trends.

As a result, demand for Nvidia products has soared, boosting the company’s sales and profits as tech giants including Microsoft, Google, Meta, Amazon and Apple battle to create new AI-powered products.

The increasing focus on AI products from the biggest tech companies has seen some investors suggest that Nvidia’s earnings could continue to grow, which has pushed up the company’s share price further.

The rise saw the company’s valuation reach £2.63 trillion, a valuation which is now more than 180 per cent higher than it was at the start of the year.

Eight years ago, the company’s stock was worth less than 1 per cent of its current price.

The rise of the tech company has also seen its chief executive, Jensen Huang, become a more prominent figure.

He has attained such a celebrity status that Meta boss Mark Zuckerberg even recently said Mr Huang, who is known for his signature leather jacket, is “like Taylor Swift, but for tech”.

Daniel Bathurst, head of product at AI start-up Nscale, said Nvidia’s rise highlights just how prominent a sector AI has become.

“Nvidia’s relentless rise to the top of the leader board illustrates a crucial point: powerful hardware is the foundation upon which the AI revolution is built,” he said.

“As enterprise and start-ups alike bet big on AI, more players are entering this arena and catching up quickly. In this battleground for AI spend, constant innovation is king.

“But, while powerful chips are a key ingredient, the AI ecosystem is more than just hardware. We need a diverse offering at the chip, hardware, and software level to support a thriving, sustainable AI landscape.

“As AI continues to develop, collaboration and diverse innovation in every element of the infrastructure will be crucial to unlocking its full potential.”

Dan Coatsworth, investment analyst at AJ Bell, said: “Nvidia is enjoying a network effect – the more people talk about it, the more publicity it gets and the greater the demand for investors to own the shares.

“This creates a virtuous circle and has made the AI chip giant one of the hottest stocks to own in decades. Just as you think the hype is about to die down, along comes another wave to drive the shares even higher.

“Having yesterday surpassed Microsoft to become the world’s most valuable company, Nvidia’s shares kept on rising in after-hours trading.”