Nvidia's market cap hits $3 trillion, surpassing Apple and Microsoft

From Nasdaq: 2024-07-03 06:45:00

Nvidia (NASDAQ: NVDA) has surged by 150% this year, becoming the largest public company by market cap. Its total market cap now stands at $3 trillion, with a share price of about $123 and 24.6 billion shares outstanding.

The top companies with the highest market caps, including Nvidia, have been outperforming the market this year. Companies like Microsoft and Apple are established leaders with strong investor confidence.

Nvidia’s market cap growth is driven by its AI chips’ demand for generative AI applications. The stock price increase reflects the company’s strong performance and impressive revenue growth since the beginning of the AI craze.

Despite its initial surge following a 10-for-1 stock split, Nvidia has dropped to third place in market cap ranking. Valuation concerns have also emerged, with a high P/E ratio of 72, indicating an expensive stock price.

Investors are questioning if Nvidia deserves to be the most valuable company. While it may not match Amazon or Apple in sales or profit, its rapid growth potential in AI-driven applications is being factored into its valuation.

Before investing $1,000 in Nvidia, consider that it wasn’t among the Motley Fool Stock Advisor’s top 10 stock picks with potential for monster returns. Stock Advisor offers guidance on building a successful portfolio with regular analyst updates and new stock recommendations.



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