LAS VEGAS, NEVADA: Nvidia CEO Jensen Huang (R) announces an expanded generative AI collaboration with Amazon Web Services in November 2023. ©  Noah Berger/Getty Images for Amazon Web Services

American chip giant Nvidia overtook Apple to become the second-most-valuable company in the world on Wednesday, after the semiconductor designer’s valuation surged past the $3 trillion mark.

Nvidia’s climb past Apple marked a shift in Silicon Valley, which the latter has dominated since the launch of the iPhone in 2007, Reuters noted.

Nvidia’s market value sat just behind that of software technology corporation Microsoft. The maker of the Windows operating system is also a key player in the artificial intelligence (AI) industry, being the largest investor in ChatGPT-maker OpenAI.

On Wednesday, Nvidia’s share price rose by 5.2% to more than $1,224, valuing the company at $3.012 trillion. Apple’s market capitalization was at $3.003 trillion that day. On Thursday, both companies’ shares declined slightly, bringing their market capitalization to the same level of $2.98 trillion. Microsoft remains the world’s most-valuable company at $3.16 trillion as of Thursday.

Nvidia’s surge has been attributed to the company’s plans for a ten-for-one stock split. Investors who own Nvidia’s stock at the end of trading on Thursday will be eligible to receive nine additional shares for each share they hold. The value of shares will be reduced by a factor of 10, making the stock more affordable to small-time individual investors.

“Nvidia is making money on AI right now, and companies like Apple and Meta are spending on AI,” said Jake Dollarhide of investment advisory firm Longbow Asset Management, as quoted by Reuters. It may be a “foregone conclusion” that Nvidia will overtake Microsoft as well, he added.

Nvidia’s stock has surged by 147% so far this year, with demand for its top-of-the-line processors far outstripping supply, Reuters reported, while Microsoft and Meta race to extend their own AI computing capabilities.

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Founded in 1993, Nvidia originally made computer chips that process graphics, particularly for computer games. It then started adding features to its chips intended to help machine learning, increasing its market share. The wave of investment in AI-powered tech has resulted in the company’s explosive growth.

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