Nvidia became the world’s most valuable company after its share price hit an all-time high on Tuesday.
The stock closed at nearly $136, up 3.5%, surpassing Microsoft’s market value and overtaking Apple earlier this month.
Nvidia, an American company specializing in computer chips for artificial intelligence (AI) software, has seen increased demand for its products, boosting its sales and profits over the last few years.
Many investors are optimistic about further earnings growth, which has driven the share price up, though some question its lofty valuation.
With Tuesday’s share price rally, the company’s market value has reached $3.34 trillion (£2.63 trillion), nearly doubling since the start of this year. Eight years ago, the stock was worth less than 1% of its current price.
Competition among AI developers is intense, with tech giants like Microsoft, Google-owner Alphabet, Meta, and Apple vying to create a leading product.
This competition benefits Nvidia, which holds a dominant position in the AI chip market.
Investors are confident that Nvidia will continue to increase in value, as its sales and profit figures have consistently exceeded analysts’ expectations in recent years.
In May, after its latest set of financial results were published, Quilter Cheviot technology analyst Ben Barringer said the company had “once again cleared a very high hurdle”.
“Demand is showing no signs of switching off either,” he added.
However, a minority are more cautious.
In February, Barclays credit analyst Sandeep Gupta argued that Nvidia’s large market share would be hard to maintain given the increasing number of rivals and questioned how Nvidia’s customers would monetise AI software.