Chip-maker Nvidia became the world’s most valuable company after its share price climbed to an all-time high on Tuesday.
It is now worth $3.34tn (£2.63tn), with the price having nearly doubled since the start of this year.
The stock ended the trading day at nearly $136, up 3.5%, making it more valuable than fellow tech giant Microsoft. It overtook Apple earlier this month.
The American company’s meteoric rise has been fuelled by its dominance of the market in the chips needed for artificial intelligence (AI), which is currently experiencing explosive growth.
Many investors believe its earnings can grow even more, which has caused its share price to soar, though some have questioned its sky-high valuation.
Eight years ago, the stock was worth less than 1% of its current price.
Back then, Nvidia’s value came from its competition with rival AMD, in a race to make the best graphics cards.
In recent years though it has benefited from a boom in demand for chips that train and run generative AI models, the most well known of which being OpenAI’s ChatGPT.
The firm also benefitted significantly from a rush to mine Bitcoin in 2020, which saw a sharp uptick in sales of its graphics cards.
The rise and rise of the tech giant has been mirrored by the increasing profile of its boss Jensen Huang, who some have dubbed the “Taylor Swift of tech”.
Competition among AI developers is fierce. Microsoft, Google-owner Alphabet, Meta and Apple are just some of the tech heavyweights battling to create a world-beating product.
This competition benefits Nvidia, which as well as developing AI tech of its own, dominates the vast majority of the AI chip market.
As such, investors believe the company will continue to surge in value. Nvidia’s sales and profit figures have surpassed many analyst 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.
