Nvidia has relinquished its position as the world’s most valuable company to Microsoft after its share price dropped by more than 3.5% on Thursday.
The AI chip giant briefly held the top spot starting Tuesday, with a market valuation of $3.34 trillion (£2.64 trillion). However, Nvidia’s shares fell to $130.78 on Thursday, reducing its value to around $3.22 trillion. Meanwhile, Microsoft’s valuation remained steady at over $3.3 trillion, allowing it to reclaim the title.
Nvidia’s rise has been driven by its dominance in the production of chips that power AI, which analysts describe as the “new gold or oil in the tech sector.”
Nvidia, Microsoft, and Apple, each valued at over $3 trillion, are in a competitive race to be the world’s most valuable company.
Although Nvidia held the top spot briefly, analysts predict that the competition among these three technology giants will remain intense.
“We believe over the next year the race to $4 trillion market cap in tech will be front and centre between Nvidia, Apple, and Microsoft,” Wedbush Securities said in a note earlier this week.
Nvidia’s stock has surged due to increasing demand for chips that train and run generative AI models, like OpenAI’s ChatGPT.
The company also experienced significant gains during the 2020 Bitcoin mining boom, which drove up sales of its graphics cards.
Nvidia’s ascent has paralleled the rising prominence of its CEO, Jensen Huang, who has gained considerable fame, especially in his native Taiwan, where fans regard him as a rock star.