Nvidia has overtaken Microsoft to become the world's most valuable public company, although history shows it isn't the most valuable of all time.
Only recently, Nvidia overtook Apple in terms of net worth to become the world's second most valuable public company. The momentum didn't stop there, however, and now Nvidia has knocked Microsoft off its perch to be come the number one most valuable company in the world at $3.335 trillion.
You'll not be surprised to learn that much of the value of Nvidia has been driven by the recent surge in AI development. AI has been playing a front and centre role in the company's recent chip developments, which have been seen by many as superior to its competitors. The fact that the chips are in high demand but short in supply has helped things along.
It is a tenuous position to hold, however. With some analysts warning of an AI 'bubble' that could burst, Nvidia has to be wary. One small misstep could result in that value tanking. The recent rise has been incredibly fast, with the company's value surging from $1 trillion to $2 trillion in the space of only nine months to February this year. Incredibly, the jump from $2 trillion to over $3 trillion has taken a mere four months, with the company absolutely demolishing all expected revenue figures.
To put Nvidia's value into perspective, the rise in market capitalisation value on Tuesday alone was over $110 billion. That's the equivalent of the entire value of Lockheed Martin in a single day.
Nvidia's recent valuation is an absolutely mind-bending number, but in terms of the past, it isn't the highest ever seen when viewed in historical context. Today, we expect technological companies to be worth the highest values, but it wasn't always the case. You might expect that a company like Ford would at one time have been one of the record holders, but it wasn't even close.
Traditionally it's been the oil companies in modern times that have often taken the crown. For example, adjusting for inflation, Saudi Aramco was worth the equivalent of $4.8 trillion at its height. The company is still the sixth most valuable company by market cap at the time of writing at $1.788 trillion, placing it above Meta (Facebook). Interestingly, of the most valuable companies the next oil firm on the list is Exxon Mobil, placed at number 17, with a worth of $490.67 billion.
But, even the recent valuation of Nvidia pales in comparison to the all time record holder. At one time, the best way to become rich was to own a shipping company, and it's here that we see some staggering figures. The Dutch East India Company, which was founded 1602 and traded until 1799, was worth a staggering $8 trillion, adjusting for inflation.
For all the talk of big pharma and the oil giants, it is the tech companies that rule the roost right now, with net worths that are multiple times that of some of the healthcare and fossil fuel leaders. Although, once you get below the top seven, you have to go down to number 23 to find the next highest value tech company, Oracle, worth 'only' $397.54 billion, with Samsung close behind at $389.74 billion.
The only question is, with AI driving much of the value of Nvidia, can it expand its crown even further or will the bubble eventually burst?