American multinational technology company, Nvidia has emerged as the world’s most valuable company following the rise in its share price to an all-time high on Tuesday.
Nvidia’s stock ended the trading day at nearly $136, up by 3.5% to become more valuable than Microsoft after the firm surpassed Apple earlier in the month.
BBC reports that Nvidia makes computer chips needed for artificial intelligence (AI) software, and demand for its products has boosted its sales and profits over the last few years.
Investors are of the view that Nvidia’s earnings can grow even more, and this has caused its share price to soar, though some have questioned its sky-high valuation.
Tuesday’s share price rally means the market now values the company at $3.34tn (£2.63tn), with the price having nearly doubled since the start of this year.
Nvidia stock was worth less than 1% of its current price eight years ago, however, 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 according to BBC, benefits Nvidia, which dominates the vast majority of the AI chip market.
As such, investors believe the company will continue to surge in value as 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,” adding that “demand is showing no signs of switching off either.”
However, a minority are more cautious with Barclays credit analyst Sandeep Gupta arguing in February, that Nvidia’s large market share would be hard to maintain given the increasing number of rivals as he questioned how the company’s customers would monetise AI software.
