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  • Writer's pictureRealFacts Editorial Team

Nvidia Stock Hits $3 Trillion Market Cap

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On June 5, 2024, Nvidia reached an extraordinary milestone by hitting a market capitalization of $3 trillion. This achievement places Nvidia in an elite club, joining the ranks of Apple and Microsoft, which have surpassed the same $3 trillion market cap. Microsoft, Nvidia, and Apple currently boast market caps of $3.151 trillion, $3.061 trillion, and $3.003 trillion, respectively. Comparing Nvidia's market cap achievement with Apple and Microsoft reveals interesting insights into the different paths these tech giants have taken. 

Apple, known for its innovative consumer electronics and software ecosystems, reached the $3 trillion mark largely due to the success of its iPhone lineup, along with services like the App Store and Apple Music that complement its hardware sales. Microsoft, on the other hand, was bolstered by leveraging its stronghold in enterprise software and its diversification into hardware and professional networking. Nvidia's journey to this valuation, however, has been driven predominantly by its pioneering work in GPU technology, which has become essential for AI development, data centers, and increasingly, in automotive and other industries. Nvidia reaching this valuation underscores the growing importance of AI and high-performance computing in today's technology landscape. It also highlights the company's strategic maneuvers and innovations that have made it a dominant force in these cutting-edge fields. 

Comparing the time it took for each of these companies to reach the 3 trillion dollar market cap is also insightful. Patrick Seitz, Investors Business Daily author, wrote, “Nvidia reached the $3 trillion milestone just 66 trading days after notching a $2 trillion value. By contrast, it took Apple and Microsoft 719 and 650 trading days, respectively, to climb from $2 trillion to $3 trillion, according to Dow Jones Market Data.” This rapid growth underscores Nvidia's pivotal role in the current AI boom. 

Nvidia reached this milestone due to the stock surging by 5.2% to $1,224.40 on Wednesday, marking nearly a 29% increase since its May 22 earnings report. In that earnings report, the AI chip leader reported a staggering 461% increase in earnings per share for the fiscal first quarter, with sales soaring 262% to $26.04 billion, both figures surpassing expectations. The significant jump on Wednesday was largely driven by a late Tuesday night report from Hewlett Packard Enterprise (HPE), which highlighted strong demand for its AI servers utilizing Nvidia's H100 chips. Furthermore, HPE's CEO Antonio Neri emphasized that Nvidia continues to lead in the generative AI space. These large gains witnessed in recent weeks contributed to the staggering 147% increase that Nvidia stock has seen year to date. Investors should look forward to the effects of the 10-for-1 stock split that will go into effective on Friday.


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