Nvidia beats Microsoft to become world's most valuable company

On Tuesday, Nvidia's share price reached an unprecedented level, leading the company to become the most valuable in the world.

At the conclusion of the day's trading activities, the share price reached approximately $136, increasing by 3.5%. As a result, the company's worth exceeded that of Microsoft. It had surpassed Apple previously this month.

Nvidia produces computer chips that are required for operating artificial intelligence (AI) software. The high demand for their products has resulted in a significant increase in their sales and profits during the recent years.

Many individuals who invest think that the profits can increase by an even greater amount, and this factor has resulted in their shares being priced much higher, even though a few people have expressed concern regarding their excessively elevated value.

The recent increase in the company's share price on Tuesday has resulted in an increase in its overall market value reaching $3.34tn (£2.63tn). This surge in value is almost twice the amount when compared to the beginning of this year.

The value of the stock today is more than 100 times what it was eight years ago.

There is a strong rivalry between the developers of AI. Big tech companies like Microsoft, Alphabet (owner of Google), Apple and Meta are all fighting hard to produce the top AI product.

This contest is advantageous for Nvidia as it has a stronghold over most of the AI chip industry.

Therefore, shareholders have confidence that the corporation will maintain its growth trend. The earnings and profitability statistics of Nvidia have exceeded the predictions of numerous experts during the past few years.

During May, Quilter Cheviot's technology analyst, Ben Barringer, expressed that the company had surpassed an exceptionally challenging obstacle after their most recent financial outcomes were revealed.

He also mentioned that the demand does not seem to be slowing down anytime soon.

Nevertheless, there is a small group who are more careful.

Back in February, Sandeep Gupta, who is a credit analyst for Barclays, raised concerns regarding Nvidia's ability to retain its significant market share in light of the growing competition. The analyst also expressed doubts about how Nvidia's customers would be able to make money from AI software.