The pioneer of accelerated computing, California-based technology giant Nvidia (NVDA) has toppled tech giant Microsoft (MSFT) in market capitalisation by becoming the most valuable publicly traded company in the world.
Nvidia has a market cap of $3.45 trillion, just over Microsoft’s $3.44 trillion.
After the company reported Q2 earnings of 96 per cent per share on revenue of $44.06 billion, up 69 per cent from the year ago period, its shares popped 3 per cent on Tuesday alongside those of other chipmakers, including Broadcom (AVGO).
Shares of Nvidia are now up by close to 24 per cent over the past month as investors participated in a huge price rally. The stock reached a low of $86.62 on April 7 but just closed at $141.22 on Tuesday.
Jefferies, one of the largest investment banking and capital markets firms in the world, added Nvidia to its “Franchise Picks” list, including its highest conviction buy-rated stocks, helping in the gains. Additionally, Meta (META) announcing plans for a 20-year nuclear deal to power its data centres added to the optimism among tech stocks.
Nvidia first took the top spot by market cap back in June, and has since been switching the title back and forth with Microsoft as well as with Apple (AAPL).
Both NVDA and MSFT share prices are back at the top of a multi-month price range defined by lows set in early April and the record highs set in January and July 2024 respectively. A breakout from this range could usher in a new uptrend in these stocks, whereas a failure to break beyond the prior record highs could see their share prices retreat back into the range.
The company has also announced several billion-dollar trade deals and featured in the Computex expo in Taiwan.
While shares of Microsoft were up by just 0.22 per cent on Tuesday, the Nasdaq Composite climbed 0.9 per cent, while the S&P 500 gained 0.6 per cent and the Dow Jones Industrial Average ticked up 0.4 per cent. This upbeat market response comes despite a downgraded U.S. growth forecast by the OECD to 1.6 per cent, the slowest since 2020. (Source: Finimize)
There has been renewed optimism in markets regarding a potential resolution to the trade war after President Donald Trump dialled back some of his tariffs, most recently dropping the tariff rate on China.
However, tensions remain high as Trump prepares to discuss potential tariff increases with China’s Premier Xi Jinping by phone call this week.
Nvidia’s uptick past Microsoft to become the world’s most valuable company underscores the market’s enthusiasm for tech stocks, particularly those linked to AI. For now, investors are looking past uncertainty over economic growth forecasts and trade tensions towards a renewal of market leadership from the likes of Nvidia.
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