Nvidia becomes world's most valuable firm

SAN FRANCISCO — Nvidia became the world's most valuable company on Tuesday, dethroning tech heavyweight Microsoft as its high-end processors play a central role in a scramble to dominate artificial intelligence technology.

Shares of the chipmaker climbed 3.5 percent to $135.58, lifting its market capitalization to $3.335 trillion, just days after overtaking Apple to become the second-most valuable company.

Microsoft's stock market value was $3.317 trillion as its shares dipped 0.45 percent.

Nvidia's stunning surge in market value over the past year has become emblematic of a Wall Street frenzy driven by optimism about emerging AI technology.

While Nvidia's rally has lifted the S&P 500 and Nasdaq to record highs, some investors worry that unbridled optimism about AI could evaporate if signs emerge of a slowdown in spending on the technology.

"It's Nvidia's market; we're all just trading in it," Steve Sosnick, chief market strategist at Interactive Brokers, said.

Nvidia has also become the most traded company by far on Wall Street, with daily turnover recently averaging $50 billion, compared with about $10 billion each for Apple, Microsoft and Tesla, according to London Stock Exchange Group data.

Nvidia's stock has nearly tripled so far this year, compared with a rise of about 19 percent in Microsoft shares, with demand for its top-of-the-line processors outpacing supply.

Tech giants Microsoft, Meta and Google-owner Alphabet are competing to build their AI computing capabilities and add the technology to their products and services.

An insatiable appetite for Nvidia's AI processors, viewed as far superior to competitors' offerings, has left them in tight supply, and many investors view Nvidia as the greatest winner to date from surging AI development.

"Nvidia has been getting a lot of positive attention and has been doing a lot of things very correctly, but a small misstep is likely to cause a major correction in the stock, and investors should be careful," Oliver Pursche, senior vice-president at Wealthspire Advisors in New York, said.

Agencies Via Xinhua