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Nvidia reclaimed the title of the world’s most valuable company, surpassing Microsoft with a market valuation of $3.45 trillion. Its stock soared 24% last month.
Nvidia’s rapid ascent has been powered by relentless demand for its AI chips, which are widely used by tech giants including OpenAI.
Nvidia Corporation has once again claimed the title of the world’s most valuable company, overtaking Microsoft on Tuesday, June 3. This marks the first time since January 24 that the AI chipmaker has reclaimed the top position in terms of market capitalisation.
The company’s shares closed the day with a market valuation of $3.45 trillion in the last trading session, narrowly edging past Microsoft’s $3.44 trillion. Nvidia’s rapid ascent has been powered by relentless demand for its AI chips, which are widely used by tech giants including OpenAI.
Despite facing headwinds such as US export restrictions and geopolitical tariff risks, Nvidia has shown strong resilience. Its stock has soared 24% over the past month, adding $1 trillion in market value in just the last two months.
Strong Financial Performance
In its latest quarterly earnings, Nvidia reported a 69% jump in revenue, reaching $44.06 billion, while earnings per share (EPS) came in at $0.96 — both figures beating Wall Street estimates. The results helped ease investor concerns over potential revenue slowdowns due to chip export curbs, especially to China.
The company’s performance reaffirmed its dominance in the global AI chip market and its ability to continue scaling production, including its much-anticipated Blackwell chips.
Still Attractive on Valuation Metrics
Even after its meteoric rise, Nvidia is trading at approximately 29 times its projected earnings for the next year — notably below its 10-year average of 34x. In comparison, the broader Nasdaq 100 index trades at 26x, despite lower expected revenue growth across other major tech firms.
Nvidia’s PEG ratio, which compares a stock’s valuation with its expected growth, remains below 0.9 — the lowest among the so-called “Magnificent Seven” tech majors (which include Apple, Amazon, Alphabet, Tesla, and Meta).
Global Risk Mitigation
While China accounted for 13% of Nvidia’s revenue in the last quarter, ongoing US-China tensions around advanced semiconductor exports continue to pose a risk. However, the company has diversified its exposure by entering strategic supply agreements with Middle Eastern countries during US President Donald Trump’s recent diplomatic visit to the region.
Nvidia Q1 Results, Q2 Outlook
Nvidia earned $18.8 billion, or 76 cents per share, during the first quarter, a 26% increase from the same time last year. Its revenue surged 69% from a year ago to $44.1 billion. If not for a $4.5 billion charge that Nvidia absorbed to account for the US government’s restrictions on its chip sales to China, Nvidia would have made 96 cents per share, far above the 73 cents per share envisioned by analysts.
In a positive sign, Nvidia predicted its revenue for the May-July period would be about $45 billion, roughly the level that investors had been anticipating. The forecast includes an estimated $8 billion loss in sales to China due to the export controls during its fiscal second quarter, after the restrictions cost it about $2.5 billion in revenue during the first quarter.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
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