Nvidia beats Microsoft to become world's most valuable company

Semiconductor giant Nvidia has gone past Microsoft to become the most valuable company in the world.

As Nvidia’s shares surged by more than 4.5 per cent on Tuesday, the company’s market cap soared to $.3.34 trillion, according to Yahoo Finance.

As of Tuesday, Microsoft’s market cap is $3.31 trillion, followed by Apple’s $3.28 trillion.

On the back of its chips driving the world’s artificial intelligence (AI) wave, Nvidia’s shares have surged by 173 per cent this year, according to Reuters.

Earlier this month, Nvidia had surpassed Apple to become the world’s second-most valuable company. The two companies were engaged in a back-and-forth contest for the position. Now, days later, it is the world’s number one company.

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Nvidia’s chips are new oil, says analyst

The way Nvidia’s chips have driven its shares, an analyst has compared the company’s rally to the oil boom.

In a note to investors, Daniel Ives of Wedbush Securities said that the Nvidia’s graphic processing unit (GPU) chips are the new oil and the company is in contest to become the first $4 trillion company.

“We believe over the next year the race to $4 Trillion Market Cap in Tech will be front and center between Nvidia, Apple, and Microsoft…Nvidia’s GPU chips are in essence the new gold or oil in the tech sector as more enterprises and consumers quickly head down this path with the 4th Industrial Revolution well underway,” said Ives, as per Bloomberg.

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Nvidia makes chips that are highly sought-after for running the data centres across the world. These data centres help run powerful computers and are also used for running AI applications.

Nvidia has a market share of 80 per cent in AI-related chips used in data centres, according to CNBC.

The report further said that the company’s business rose 427 per cent in the most recent quarter on the back of its AI chips. Such chips accounted for 86 per cent of the total sales of the company.