*Several Times Bigger Than Nigeria’s Economy
On June 5, 2024, during trading hours, chipmaker, Nvidia, overshot the $3 trillion valuation mark, becoming the second most valuable public company in the world, ahead of Apple Inc.
In comparative terms, for the sake of emphasis and clarity, boasting a market capitalization of $3.01 trillion amid Nigeria’s Gross Domestic Product (GDP) which was projected to reach $253 billion by tail end of 2024, it meant that Nvidia’s valuation was close to being 12 times the size of the economy of the African giant.
That was as of a year ago.
Now, as of yesterday, Wednesday, July 9, Nvidia became the first public company in history to scale a $4tn market value as its stock price continues years-long stratospheric rise, beating off its previous superiors.
Shares of the top chip designer rose roughly 2.4% to $164, benefiting from the ongoing surge in demand for artificial intelligence (AI) technologies.
Nvidia’s chips and associated software are considered world leaders for building AI products.
The firm achieved a $1tn market value for the first time back in June 2023 and the surge continued unabated with its market value – the total value of its shares – more than tripling in about a year, faster than Apple and Microsoft, the only other U.S firms with a market value of more than $3tn.
Apple was the first company to reach a valuation of $3tn, back in 2022.
Microsoft is the second-biggest U.S company, with a market value of about $3.75tn. Nvidia’s value is equivalent to 7.3% of the entire S&P 500, Wall Street’s benchmark share index. Apple and Microsoft, account for about 7% and 6%, respectively.
Nvidia has rebounded about 74% from its April lows, when global markets were jolted by Donald Trump’s tariff volley. U.S export controls forbid Nvidia from selling its most advanced chips to China, a restriction the company has pushed back on.
However, optimism around trade partners reaching deals with the U.S have lifted stocks of late, with the S&P 500 hitting an all-time high.
Daniel Ives, tech analyst at Wedbush, predicted that more big tech giants will come to join Nvidia in the $4tn market club.
“The poster children for the AI revolution are led by Nvidia and Microsoft as both are foundational pieces of building on the biggest tech trend we have seen in our 25 years covering tech stocks on the Street,” he said.
Microsoft will hit $4tn “this summer”, Ives said, “and then over the next 18 months the focus will be on the $5tn … as this tech bull market is still early being led by the AI revolution.”
Nvidia was birthed in 1993 by three persons: CEO, Jensen Huang, Chris Malachowsky, and Curtis Priem.
The founders had a vision of introducing 3D graphics to computer graphics and taking accelerated computing to the next level.
They had their first contract with Japanese gaming company, Sega to build the graphics chip for the Dreamcast gaming console.
By 1999, Nvidia developed its first general processing unit (GPU) product for sale, GeForce 256, and it was a commercial success. In the same year, the company went public, listing on NASDAQ with a share price of $0.44.
A GPU is a specialized electronic circuit designed for digital image processing and for acceleration of computer graphics, being present either as a discrete video card or embedded on motherboards, mobile phones, personal computers, workstations and game consoles.
Nvidia is the world’s leading producer of GPUs. The company moved into AI chip making, with a customer base of over 1,600 generative AI companies.
