NVIDIA slips 3 per cent, loses top spot to Microsoft. However, historic bull run to continue, believe experts

On Thursday, NVIDIA’s shares took a significant hit, dropping by nearly 3.4 per cent, which caused the company to lose its brief status as the world’s most valuable company. This title was reclaimed by Microsoft, marking another shift in the ongoing competition among tech giants.

NVIDIA had briefly surpassed Microsoft in market capitalization on Tuesday. However, by Thursday, NVIDIA’s market value had fallen to around $3.34 trillion, reflecting a significant loss of about $91 billion from its previous closing value. The company’s shares were trading at approximately $131.88.

Microsoft, meanwhile, also experienced a slight dip. Its market value decreased to $3.30 trillion, with shares dropping by 0.4 per cent to $444.8 in the afternoon trading session.

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These fluctuations are part of a fierce competition among NVIDIA, Microsoft, and Apple, all vying for the top spot as the world’s most valuable company. Apple, led by CEO Tim Cook, saw its market capitalization at $3.22 trillion, with its shares declining by 2.2 per cent to $210.10 during the same afternoon.

Adding to the tech industry’s dynamic developments, Elon Musk announced via his social media platform X on Wednesday that Dell and Super Micro are providing server racks for the supercomputer of his startup, xAI.

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This supercomputer will enhance the capabilities of xAI’s artificial intelligence tool, Grok.

Following Musk’s announcement, Dell Technologies and Super Micro Computer saw their shares fall by 1 per cent and 0.7 per cent, respectively. These companies produce servers equipped with NVIDIA chips, benefiting from the rising demand for processors crucial for AI applications.

Earlier this year, Musk disclosed that training the Grok 2 model required about 20,000 NVIDIA H100 graphics processing units (GPUs).

Looking ahead, he mentioned that future models, such as Grok 3, would need around 100,000 NVIDIA H100 chips.

Despite the recent dip, NVIDIA has been enjoying a remarkable year. The company’s stock price has almost tripled, driving substantial gains in the broader market. Similarly, Super Micro shares have more than tripled in value, and Dell’s stock has surged by nearly 95 per cent this year.

The Philadelphia SE Semiconductor Index, which tracks the performance of companies in the semiconductor industry, has risen by nearly 34 per cent since hitting a recent low in April. It reached a record high on Tuesday, reflecting the industry’s strong performance.

Analyst Dan Ives from Wedbush Securities commented on the current tech market landscape, suggesting that the rise of AI technology will continue to benefit major tech companies.

He pointed out that established firms like Microsoft, Oracle, Dell, Amazon, Meta, Apple, and Google will likely grow stronger as they leverage AI to capitalize on their extensive installed bases across various sectors.

The competition among NVIDIA, Microsoft, and Apple to be the world’s most valuable companies underscores the rapidly evolving nature of the tech industry. While each company has experienced its share of fluctuations, the overall trend indicates a robust market driven by advancements in AI and semiconductor technology.

This ongoing race highlights the critical role of innovation and strategic positioning in maintaining and enhancing market leadership in the tech sector.