On June 18, Nvidia finally became the most expensive company in the world.
The company’s shares soared by over 3% that day, propelling it to the top spot in terms of market capitalization.
The previous leader, Microsoft Corporation(MS), saw a slight decline of 0.2%, and Apple’s shares also fell by more than 1%, allowing Nvidia’s 3.5% surge to reshuffle the top three rankings in market capitalization.
Nvidia ranked first place after its market capitalization hit $3.342 trillion.
MS, which had knocked Apple from the top spot earlier this year, saw its market capitalization shrink to $3.325 trillion due to a slight decrease in its stock price.
Apple’s market capitalization also dwindled to $3.276 trillion as its stock price fell by 1.4%.
Despite challenges from AMD and Intel Corporation, Nvidia remains the dominant company in the AI semiconductor market, holding more than 80% of the market share.
Its stock price skyrocketed by 239% last year and has surged by over 170% this year.
In comparison, MS saw increases of 57% and 19% respectively during the same period.
Among the three companies, Apple had the lowest stock price growth, with an increase of 48% last year and 11% this year.
Apple’s 11% increase this year is largely due to the effect of the World Developers Conference (WWDC) that took place last week. Apple’s stock price began to rebound about a month before the WWDC.
Nvidia’s upward trend faltered in the second quarter.
Although Nvidia’s AI semiconductors continued to show solid growth, there were doubts about whether the company could meet the high expectations of investors, causing its stock price to stagnate.
However, after the market closed on May 22, Nvidia’s stock price started to surge again.
Investors cheered the company’s impressive quarterly results, which exceeded their high expectations.
Nvidia also decided to carry out a much-anticipated 10-for-1 stock split.
While the 10-for-1 stock split divides each existing share into 10 shares, it does not affect the company’s fundamentals. It has created expectations that it will lower the stock’s face value of over $1,000 to one-tenth, making it more accessible to small investors. Nvidia’s split shares began trading on the 10th.
With its overwhelming performance, optimistic outlook, and favorable stock split, Nvidia’s stock price took flight.
Based on the 3.5% increase in the stock price on that day, the growth rate since May 22 is nearing 43%.
Meanwhile, there are high expectations that Nvidia, thanks to the stock split lowering its face value, will surpass Intel and be included in the Dow Jones Industrial Average.
Unlike the S&P 500, which is based on market capitalization, the Dow Jones index moves based on stock price.
