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Nvidia Surges Past USD 3 Trillion Market Cap, Overtakes Apple as Second-Largest US Company

06 June 20245 mins read by Angel One
This article explores Nvidia's meteoric rise to become the second-largest company in the U.S. stock market, surpassing Apple and reaching a market capitalization of over USD 3 trillion for the first time.
Nvidia Surges Past USD 3 Trillion Market Cap, Overtakes Apple as Second-Largest US Company
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Record-Breaking Milestone

On June 5, Nvidia achieved a significant milestone as its shares surged by 5.2%, closing at a record USD 1,224.40. This remarkable rise pushed the chip maker’s market value above USD 3 trillion, allowing it to surpass Apple and become the second-largest company in the US market, with Microsoft retaining the top spot.

The rally in Nvidia shares was part of a broader gain in tech stocks, driven by softer US economic data and a decline in Treasury yields. Investors are hopeful that the Federal Reserve may cut rates as early as July. Nvidia, a prominent player in the AI sector, has seen its stock rise over 148% year till date and an astounding 215.32% over the last year. Over the past five years, Nvidia shares have soared more than 3,500%, a stark contrast to the Nasdaq’s gains of 14%, 31%, and 168% over the same periods.

Sr.No Company Name Market Cap

(USD billion)

Stock Price % Change Industry Return 5Y
1 Microsoft Corporation 3,151.37 424.01 1.91% Software – Infrastructure 242.36%
2 NVIDIA Corporation 3,011.82 1,224.40 5.16% Semiconductors 3503.56%
3 Apple Inc 3,003.49 195.87 0.78% Consumer Electronics 346.13%
4 Alphabet Inc. 2,179.68 177.07 1.11% Internet Content & Information 228.81
5 Amazon.com, Inc. 1,886.51 181.28 1.08% Internet Retail 106.00%

AI Leadership and Future Plans

Nvidia has cemented its position as the go-to supplier for AI chips and integrated software. Tech giants such as Amazon, Google, Meta, Microsoft, and Tesla rely on Nvidia’s hardware to power their AI models and services. The company recently announced plans to release a high-powered version of its Blackwell chip, called Blackwell Ultra, in 2025, followed by a new AI chip platform, Rubin, in 2026, and an Ultra version of Rubin in 2027.

Nvidia’s financial performance has been stellar. In the first quarter, the company reported adjusted earnings per share of USD 6.12 on revenue of USD 26 billion, reflecting jumps of 461% and 262% from the same period a year ago. The Data Center segment saw a 427% increase in revenue year-over-year, reaching USD 22.6 billion and accounting for 86% of the company’s total revenue for the quarter. The gaming segment, previously Nvidia’s most important business, reported revenue of USD 2.6 billion.

Stock Split and Dividend Increase

In addition to its impressive financial results, Nvidia announced a 10-for-1 stock split on June 7. The company also plans to raise its dividend from USD 0.04 per share to USD 0.10 per share, further enhancing shareholder value.

Challenges and Competition

Despite its success, Nvidia faces growing competition from its own customers, including Amazon, Google, and Microsoft, who are seeking to reduce their dependence on Nvidia’s chips. However, Nvidia continues to maintain a strong grip on the AI market, thanks to its leadership and innovation in the sector.

Historical Context

Nvidia’s journey to a USD 3 trillion market cap has been rapid. The company reached a USD 2 trillion market cap in February 2024, less than a year after hitting the USD 1 trillion mark in May 2023. This unprecedented growth is largely attributed to the increasing demand for AI chips, which Nvidia dominates with a market share of 70% to 95% for AI accelerators.

Conclusion

Nvidia’s rise has significant implications for the tech industry. The company’s AI chips are essential for developing and deploying large AI models, such as OpenAI’s ChatGPT. This surge in AI spending has propelled Nvidia into a race to become the world’s most valuable company, a title currently held by Microsoft.

Nvidia’s ascent to a USD 3 trillion market cap and its overtaking of Apple highlight the company’s extraordinary growth and dominance in the AI sector. With its continued innovation and leadership, Nvidia is well-positioned to maintain its significant role in the tech industry.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.

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