How Nvidia Became the Leader of the AI Era

On June 18, Nvidia, a leading Artificial Intelligence (AI) stock, overtook both Microsoft Corporation (MS) and Apple to become the world’s largest company by market capitalization. Analysts interpret this as a signal that the AI era has officially arrived, as Nvidia has now overtaken Apple, which opened the smartphone era, Google, and MS, a leader in IT innovation.

According to the Wall Street Journal (WSJ), Nvidia closed at $135.58 on the New York Stock Exchange, a 3.5% increase from the previous trading day. This boosted its market capitalization to approximately $3.335 trillion, surpassing both MS ($3.317 trillion) and Apple ($3.286 trillion). During the trading session, the stock even reached a record high of $136.33.

This is the first time Nvidia has surpassed both MS and Apple to take the top spot in market capitalization. On the same day, MS’s stock fell by 0.45%, while Apple’s dropped by 1.10%.

Previously, Nvidia had briefly surpassed Apple to take the second spot in market capitalization, but its position wavered. However, it finally claimed the top spot.

Up until now, the battle for the top spot in market capitalization had been primarily between MS and Apple. MS overtook Apple in January this year, but after Apple announced its AI strategy on June 10, its stock price rose, and it reclaimed the top spot based on the closing price on June 13.

However, the competitive landscape has changed as Nvidia’s stock price has more than tripled in a year. Nvidia’s market capitalization broke the $2 trillion mark less than four months ago and surpassed $3 trillion earlier this month. However, the market capitalization difference between Nvidia and Apple is less than $50 billion, suggesting the rankings among these three companies could change again.

Nvidia’s rapid increase in corporate value is due to its dominant position in the AI semiconductor market. Nvidia’s Graphics Processing Unit (GPU) holds an 80% market share in the AI sector. Although semiconductor developers like AMD, Intel Corporation, and ARM are all developing AI chips, analysts say it will take some time before they can replace Nvidia.

Wall Street predicts that these companies will continue to compete fiercely in the AI sector, reflecting their market capitalization. Wedbush Securities Analyst Daniel Ives predicted, “In the coming year, there will be a race towards a $4 trillion market capitalization among Nvidia, Apple, and MS in the technology sector.”