Nvidia's capitalization hits $3 trillion: The company overtakes Apple

June 6, 2024  12:21

Nvidia shares jumped 5% to $1,224.40 at the end of yesterday's trading session. As a result, the company's market capitalization surpassed the $3 trillion mark for the first time in history. The rise in share prices occurred amid frenzied demand from investors once again eager to acquire a piece of a company at the center of the generative AI technology boom.

Moreover, by surpassing Apple in market capitalization, Nvidia secured the second spot among the world's largest publicly traded companies, trailing only Microsoft. This achievement by Nvidia once again highlights the impressive growth dynamics of its stock value. Over the past five years, its shares have risen by more than 3,224%. In the coming days, the company also plans to conduct a 10-for-1 stock split.

Previously, Apple became the first American company to reach a market capitalization of $3 trillion, achieving this milestone in January 2022. In January 2024, Microsoft joined them. Nvidia, founded in 1993, crossed the $2 trillion mark in February of this year. It took just under three months to add another trillion to this sum, according to CNBC.

In May, the company reported its financial results for the first quarter, showing sustained booming demand for its expensive and powerful graphics processing units (GPUs). Nvidia's revenue for the quarter amounted to $26 billion, more than triple the figure from a year earlier. Additionally, the company exceeded Wall Street's expectations for sales and profits. Revenue for the current quarter is projected to be $28 billion.

It is noted that Nvidia's rapid asset growth in recent years is driven by the tech industry's need for GPUs, which are used for developing and deploying large AI models.

Companies such as Google, Microsoft, Meta, Amazon, and OpenAI are spending billions of dollars on purchasing Nvidia GPUs. The boom in generative AI, sparked in part by the popularity of ChatGPT, has only fueled this demand. And it seems that in the foreseeable future, investors will continue to eagerly buy shares of one of the leaders in the chip and AI technology market.

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