Nvidia Surpasses Three Trillion Dollar Market Value

Nvidia Surpasses Three Trillion Dollar Market Value

The surge in artificial intelligence has propelled Nvidia’s market value beyond the three trillion dollar mark, making it only the third company to achieve this milestone. Nvidia, the US-based microchip manufacturer, saw its stock prices soar on Wednesday evening (local time) at the New York Stock Exchange, significantly boosting the company’s market value.

Nvidia’s stock continued its record-breaking trend of the past weeks and months. With yesterday’s increase of nearly 5.2 percent, closing at $1,224.40, the stock became one of the top performers in the Nasdaq 100. In after-hours trading, the stock saw a slight further increase. Based on the closing price, the market value stood at 3.01 trillion dollars, just edging past Apple. Microsoft remains the leader with a market value of 3.15 trillion dollars.

More Than 700 Percent Increase

Aside from Nvidia, only Apple and Microsoft have crossed the three trillion dollar threshold. Nvidia stands out as its market value increase has been extraordinarily rapid: since the end of 2022, Nvidia’s stock has surged by more than 700 percent. In the same period, Apple’s stock increased by 50 percent, while Microsoft’s rose by nearly 80 percent, in line with the Nasdaq 100 index. Since the beginning of the year alone, Nvidia’s shares have nearly doubled in value, while Apple’s shares have gained less than two percent.

Nvidia Plans 1-to-10 Stock Split

The dramatic rise in Nvidia’s stock price has made the shares too expensive for many investors. To address this, Nvidia announced a 1-to-10 stock split for this Friday. Current Nvidia shareholders will receive ten shares for every one they hold. For investors, the fundamental value remains unchanged, but the price per individual share will drop to one-tenth of its pre-split value. Starting tomorrow, a single share will cost around $122. This split means that future profits and dividends will be distributed across ten times as many shares.

According to experts, this stock split will primarily benefit the company. As Christian Andres, a finance professor at the Otto Beisheim School of Management, explained to Handelsblatt, the split makes the shares appear cheaper and more accessible, thereby increasing market liquidity through more frequent trading.

Leading in AI Technology

Nvidia’s success is largely due to its dominance in the artificial intelligence chip market. The company’s semiconductors are crucial for training AI software in data centers. Nvidia supplies thousands of chip systems to tech giants like Microsoft, Google, and Meta. Earlier this week, Nvidia CEO Jensen Huang announced a new AI data center platform called Rubin, set to launch in 2026, which was well-received by investors.

In addition to AI chips, Nvidia is active in digital twin technology, helping companies optimize their factory processes with virtual models. The company also produces computers for automated and self-driving cars. While rivals like Intel and AMD aim to capitalize on the AI boom, they have yet to challenge Nvidia’s leading position.

All these factors have driven Nvidia’s revenue and profits, and consequently its stock price, to new heights. In the last quarter alone, revenue soared from $7.2 billion the previous year to $26 billion, a staggering 262 percent increase. The demand remains strong, with shortages of Nvidia’s new chip systems expected to continue into the next year.

Greg Richling