Only a few days ago I wrote about how Nvidia was most valuable than Apple, taking second place, after Microsoft. Well, now Nvidia has taken over Microsoft to become the most valuable company int world with a market capitalization of 3.335 Trillions.
Nvidia’s amazing surge
Shares of Nvidia are up more than 215% over the last 12 months and more than 3,400% over the last five years. Year to date, Nvidia has gained 175%.
Nvidia first crossed a $1 trillion market cap on June 13, 2023. The stock advanced north of $2 trillion on March 1, and then rapidly crossed the $3 trillion mark for the first time on June 5 (96 days). The company’s advance from a $1 trillion to a $3 trillion market cap was the fastest on record.
Nvidia is the biggest company in the S&P 500
Nvidia’s surge has made it a top weighting in the S&P 500 (^GSPC), and the chipmaker has served a pivotal role in the benchmark index hitting record highs in 2024. If you own the S&P 500 you are in luck, you have benefited from owning Nvidia.
Up until May, the S&P 500 had traded with a near-perfect correlation to Nvidia’s price movement, meaning that as Nvidia’s stock rose, so did the broader index. As of Monday, Nvidia’s stock gains alone had contributed about one-third of the S&P 500’s year-to-date rise, according to data from Citi’s equity research team.
The company’s rise comes amid the generative AI explosion that kicked off when OpenAI debuted its ChatGPT platform in late 2022. Nvidia’s chips, modified graphics cards, and CUDA software platform are designed to both train and run AI programs, giving it a strategic advantage that experts say will take rivals AMD (AMD) and Intel (INTC) years to overcome.
Nvidia’s clients
Nvidia is the tech industry’s go-to supplier for AI chips and integrated software.
Tech behemoths, including Amazon (AMZN), Google (GOOG), Meta (META), Microsoft, Tesla (TSLA), and others, use its hardware to power everything from their cloud-based AI offerings for customers to their own AI models and services.
Now Nvidia is selling to different countries as well. NVIDIA founder and CEO Jensen Huang pitched the idea at the World Governments Summit in Dubai.
If you own the S&P 500 you are already an owner of Nvidia. Just bring out the champagne and celebrate.
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