This article was originally published on Business information.
Nvidia shares rose 4% on Tuesday, giving it a market capitalization that surpassed Microsoft’s and earned it the title of the world’s most valuable company.
The chipmaker on Tuesday boasted a market value of $3.338 trillion, topping Microsoft’s $3.326 trillion market capitalization by just $12 billion.
Nvidia shares hit an intraday high of $136.25 on Tuesday afternoon.
This equates to a split-adjusted price of $1,362.50. Nvidia Earlier this month, the stock split was 10-to-1.
2024 has already been a wild 12 months for the chipmaker, with shares up 173%. That comes after shares surged greater than 200% in 2023.
Despite this, Wall Street stays optimistic and expects even larger gains in the future, One analyst predicts that by the end of 2030 the company’s value will reach $10 trillion.
The company, whose chips have fueled the AI boom since it unveiled ChatGPT in 2022, overtook Apple to develop into the second-largest company lower than a month ago.
Many things have been going well for Nvidia these days.
The meteoric rise in stocks is expected to be an impulse The $72 billion ETF fund will undergo a major overhaul later this month, which should result in buying pressure of around $11 billion in Nvidia shares.
But more importantly, Nvidia’s profits are soaring.
While ChatGPT’s stock price has surged over 700% since its launch on November 30, 2022, the company’s underlying valuation multiple has actually fallen, meaning its earnings are growing faster than its stock price.
In November 2022, Nvidia’s projected price-to-earnings ratio was around 50x, while it is currently around 40x.
One of the reasons for concern for Nvidia investors was the possibility that competition will wipe out Nvidia’s recent gains, but it hasn’t materialized yet.
Nvidia’s closest competitor, AMD, expects to generate about $4 billion in revenue from its AI GPU this 12 months. Nvidia, meanwhile, is expected to generate greater than $120 billion in revenue this 12 months, mostly from its AI chips.
YCharts/Business Insider via BI