Nvidia overtakes Microsoft as world's most valuable company

For years, the title of world's most valuable company was a quiet game of musical chairs between Apple and Microsoft. On Tuesday, a chipmaker long known for running PC video games broke the streak.

Nvidia shares jumped 3.6% on June 18, pushing its market cap to $3.34 trillion. That nudged past Microsoft at $3.32 trillion and Apple at $3.29 trillion, officially crowning Nvidia the most valuable public company on Earth.

It’s been an absurdly quick climb. Nvidia only crossed the $3 trillion milestone and passed Apple earlier this month. Now, it sits at the very top.

The ninefold AI engine

Nvidia’s stock is up more than 170% so far this year alone. If you trace the rally back to late 2022, right before the generative AI wave took off, shares have surged over ninefold.

The rally pushed co-founder and CEO Jensen Huang's net worth to roughly $117 billion, putting him at number 11 on Forbes' global wealth rankings.

Behind that mountain of market value is actual, hard revenue. Nvidia controls roughly 80% of the data center AI chip market. Tech giants like OpenAI, Microsoft, Alphabet, Amazon, and Meta are essentially buying up every high-end processor the company can fab.

In its most recent quarter, Nvidia's data center revenue rocketed 427% year-over-year to $22.6 billion, accounting for about 86% of its entire top line. A freshly completed 10-for-1 stock split on June 7 also paved the way for potential inclusion in the price-weighted Dow Jones Industrial Average.

Beating the customer who pays the bills

What makes the milestone wild is Nvidia’s relationship with the company it just dethroned.

Microsoft isn't exactly struggling. Its own stock is up roughly 20% in 2024, powered by its deep stake in OpenAI and the push to bake Copilot into Windows and Office. But Microsoft’s Azure cloud is also one of the single biggest buyers of Nvidia GPUs.

In other words, the companies racing to mine AI gold have handed so much cash to their shovel supplier that the supplier is now worth more than the miners themselves.

Why it matters

Nvidia taking the global crown marks a historic shift: right now, raw compute power is commanding more Wall Street respect than software ecosystems and consumer devices combined.

For developers and founders, this highlights where the economic gravity lives. Access to state-of-the-art AI infrastructure is still the ultimate bottleneck, and nearly every serious model being trained today runs on Nvidia silicon. But paying the "Nvidia tax" keeps running costs high for anyone trying to build an AI business.

Strategically, we think this valuation puts a giant target on Nvidia’s back. Generating 86% of your revenue from data center purchases by a handful of massive tech giants is a double-edged sword. Microsoft, Google, Meta, and Amazon are all aggressively designing custom silicon to wean themselves off Nvidia’s pricey boards.

Nvidia’s CUDA software moat remains unmatched for now, making switching painful. But with expectations priced to absolute perfection, any hiccup in Big Tech’s AI capital spending could make staying at the top far harder than getting there.