Nvidia becomes the world's most valuable company, surpassing Apple and Microsoft

If an AI bubble burst is coming, it isn't here yet

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The big picture: Nvidia briefly overtook Apple as the world's most valuable company late last month, but this week it solidified that position for the second time in a more definitive way. The GPU maker's meteoric rise and the dethronement of Intel on the Dow Jones index signifies a major shift toward AI in the tech sector. However, uncertainty still surrounds the new technology.

Ending Wednesday with a market cap of $3.57 trillion, Nvidia has surpassed Apple to become the world's most valuable company. Over the last two years, the AI boom has multiplied Nvidia's market cap, stock price, and revenue, with no signs of slowing down.

Since generative AI began gaining popularity, companies worldwide have scrambled to acquire GPUs for AI models, with Nvidia's products being the most sought after by far. This trend has increased the company's market cap by 218 percent over the past year and more than 3,000 percent in the last five years.

Most valuable companies in the world

_{Source: companiesmarketcap.com}

Nvidia first overtook Apple to claim the top spot in June when its market cap reached $3.34 trillion. However, a brief wobble in the AI sector in September caused a $279 billion loss – the biggest one-day drop in US history.

This shift raised concerns that the AI boom, arguably the tech industry's biggest trend since the advent of the Internet, could be headed for a collapse reminiscent of the dot-com bust. While this outcome remains possible – given the uncertain financial returns from AI and lukewarm customer interest – Nvidia has since recovered all of its September losses and then some.

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With Nvidia firmly positioned at the top of the tech world alongside giants like Apple, Microsoft, Amazon, and Google, its position relative to former chip leader Intel is another sign of generative AI's impact. Chipzilla has faced multiple serious problems recently, leading to thousands of layoffs, buyout talks, and likely the company's first annual net loss in almost four decades.

Many observers believe that missing the AI boom was one of Intel's key missteps. Another stark indicator of the companies' divergence is Nvidia CEO Jensen Huang's $104 billion net worth, which briefly surpassed Intel's entire market cap last month, although Intel has since rebounded to $107 billion.