For the first time in history! NVIDIA's intraday market value surpasses Microsoft, rising to the world's number one spot
Global funds flock to AI/technology, with Apple, Microsoft, and NVIDIA, the three "30 trillion giants," taking turns to hit historical highs in market value. As of this year's Monday, NVIDIA has risen by over 160%. NVIDIA's latest highest target price on Wall Street is $200, with over 50% upside potential from Monday's closing price. The most optimistic analysts predict that its market value will approach $5 trillion within the next year
On Tuesday night, NVIDIA topped the global market value list.
On Tuesday, June 17th, during the midday trading session in the Eastern Time, NVIDIA's stock price surged more than 3.2%, reaching a market value of $3.33 trillion, surpassing long-time market leader Microsoft. Earlier this month, NVIDIA first broke through the $3 trillion market value mark and successfully surpassed Apple. This leap in market value once again proves the market potential of artificial intelligence technology and the great interest of investors.
Since the end of 2022, NVIDIA's stock price has grown by more than nine times. As of the close of trading on Monday, June 16th, the stock price had soared by 164.5% this year. This growth is attributed to its dominant position in the AI chip market, especially in the AI chips used in data centers, where NVIDIA holds about 80% market share. With companies like OpenAI, Microsoft, Alphabet, Amazon, Meta, and others having a high demand for processors, NVIDIA's business has grown rapidly.
In the most recent quarter, NVIDIA's data center business revenue grew an astonishing 427% year-on-year, reaching $22.6 billion, accounting for approximately 86% of the company's total sales. This performance growth is due to the strong demand for its H100 accelerator, which helps data centers perform complex computing tasks required for AI applications.
Founded in 1991, NVIDIA was initially a hardware company selling 3D gaming chips to gamers. Over time, NVIDIA ventured into cryptocurrency mining chips and cloud gaming subscription services. However, in the past two years, with Wall Street's recognition of NVIDIA's technological potential in the field of AI, NVIDIA's stock price has experienced explosive growth. This surge has led to the net worth of the company's co-founder and CEO, Jensen Huang, reaching approximately $117 billion, making him the 11th richest person in the world according to Forbes.
Meanwhile, Microsoft, as another major beneficiary of the AI boom, has seen its stock price rise by about 20% so far this year. Microsoft holds a significant stake in OpenAI and has integrated AI models into its key products including Office and Windows. As one of the largest buyers of NVIDIA's Graphics Processing Units (GPUs), Microsoft's Azure cloud services have a huge demand for NVIDIA GPUs. Microsoft recently released a new generation laptop designed to run its AI models, called Copilot+.
Despite NVIDIA's rapid market value growth, the company has not yet been included in the Dow Jones Industrial Average, which is a benchmark index consisting of 30 stocks historically representing the most valuable companies in the United States. Last month, with the earnings release, NVIDIA announced a 10-for-1 stock split plan, which took effect on January 7th. This stock split plan may increase the likelihood of NVIDIA being included in the Dow Jones index, as the index is a price-weighted index where companies with higher stock prices have a greater impact on the benchmark index
Most Optimistic Analyst: NVIDIA's Market Value Could Approach $5 Trillion in the Next Year
After NVIDIA completed a 1-for-10 stock split on June 10, Rosenblatt Securities analyst Hans Mosesmann stated on Tuesday that NVIDIA will continue its upward trend, with a market value of nearly $5 trillion in the next year. Mosesmann also raised NVIDIA's target price from $140 to $200, representing a potential increase of nearly 52.7% from Monday's closing price, making it the highest price target on Wall Street. Since tracking NVIDIA's stock in 2017, Mosesmann has consistently given it a buy rating and remains optimistic about the company's hardware products. He particularly emphasized that the combination of NVIDIA's software and hardware is the company's true highlight.
In his report to clients, Mosesmann predicted that NVIDIA's software business will significantly grow in the overall sales mix over the next decade, leading to an upward trend in the company's valuation due to its sustainability.
NVIDIA's stock has become a favorite among sell-side analysts, with 64 analysts tracked by the media giving it a buy rating, 7 giving a hold rating, and only 1 giving a sell rating.
Wedbush Securities analyst Daniel Ives pointed out in his report that he believes NVIDIA, Apple, and Microsoft will be the focus of the race to a $4 trillion market value in the tech industry in the next year. With the advancement of the Fourth Industrial Revolution, the demand for these chips from enterprises and consumers is increasing, and NVIDIA's GPU chips are essentially the new gold or oil in the tech sector.
Michael Lippert, Vice President and Portfolio Manager at Baron Capital Inc., emphasized in an interview that NVIDIA is not just a chip sales company; they also provide systems, and the company's proprietary software and development ecosystem are key factors in its success