Nvidia Passes Microsoft as Most Valuable Company

On Tuesday 3 June, Nvidia (NVDA) overtook Microsoft (MSFT) in market capitalisation making it the most valuable publicly traded company in the world. Nvidia has a market cap of $3.45 trillion, just over Microsoft’s $3.44 trillion.

NVDA shares popped 3% on Tuesday alongside those of  other chipmakers, including Broadcom (AVGO), which appeared to be attracting interest ahead of its Q2 earnings report this week. Nvidia first took the top spot by market cap back in June, and has been trading the title back and forth with Microsoft, as well as with Apple (AAPL), since.

Nvidia vs Microsoft Stock Price Performance Chart

Both NVDA and MSFT share prices are back at the top of a multi-month price range defined by lows set in early April and the record highs set in January and July 2024 respectively. A breakout from this range could usher in a new uptrend in these stocks, whereas a failure to break beyond the prior record highs could see their share prices retreat back into the range.

*Past performance does not indicate future results 

Nvidia Stock Back in Favour

Shares of Nvidia are now up by close to 24% over the past month as investors have scrambled to take part in a huge price rally. The stock reached a low of $86.62 on April 7 but just closed at $141.22 on Tuesday (3 June).

Last week the company reported Q2 earnings of 96 cents per share on revenue of $44.06 billion, up 69% from the year ago period. The company has also announced several billion-dollar trade deals and featured in the Computex expo in Taiwan.

The gains were aided by Jefferies, one of the largest investment banking and capital markets firms in the world, adding Nvidia to its “Franchise Picks” list, including it’s highest conviction buy-rated stocks. Additionally, Meta (META) announcing plans for a 20-year nuclear deal to power its data centres added to the optimism among tech stocks.

Microsoft & Other Tech Stocks

While shares of Microsoft were up by a meagre 0.22% on Tuesday, the Nasdaq Composite climbed 0.9%, while the S&P 500 gained 0.6% and the Dow Jones Industrial Average ticked up 0.4%. This upbeat market response comes despite a downgraded U.S. growth forecast by the OECD to 1.6%, the slowest since 2020. (Source: Finimize)

There has been renewed optimism in markets regarding a potential resolution to the trade war after President Donald Trump dialled back some of his tariffs, most recently dropping the tariff rate on China. This more buoyant sentiment has led market participants back to some of the big winners over the past few years, notably the Magnificent 7 stocks. 

However, tensions remain high as President Trump prepares to discuss potential tariff increases with China’s Premier Xi Jinping by phone call, potentially as soon as this week.

Conclusion

Nvidia’s leap past Microsoft to become the world’s most valuable company highlights the market’s ongoing enthusiasm for tech stocks, particularly those linked to AI. For now, investors appear to be looking through the lingering uncertainty over economic growth forecasts and trade tensions towards a renewal of market leadership from the likes of Nvidia.

*Past performance does not indicate future results