Nvidia's market value breaks $3 trillion

Background

Nvidia designs graphics processing units, or GPUs. The chips were originally built to draw images on screens; because they run many simple calculations at once, they also suit the matrix arithmetic that machine-learning models depend on. As large AI systems moved out of research labs and into commercial products, orders for data-center chips grew quickly, and Nvidia's revenue and share price grew with them.

Crossing the $3 trillion mark

On 5 June 2024 Nvidia's market value broke through the $3 trillion mark, joining Microsoft and Apple in the $3 trillion club.^[1]

The speed was the striking part. Nvidia had passed $2 trillion on 1 March 2024, so the climb from $2 trillion to $3 trillion took just over three months, or 104 days.^[1] Over a longer window the contrast is sharper still: the company went from $1 trillion in May 2023 to $3 trillion in about a year, a climb that took Microsoft six years and Apple nearly four.^[1][2]

Market value here is simply the share price multiplied by the number of shares, so a rising price and a rising valuation are the same story told two ways.

The world's most valuable company

The ranking changed again two weeks later. On 18 June 2024 Nvidia's shares closed up 3.51% at $135.58, giving the company a market value of $3.34 trillion and making it the world's most valuable company, ahead of Microsoft and Apple.^[2]

Split and roadmap

Around 10 June 2024 a ten-for-one stock split took effect, a move the company pushed partly to raise its chances of joining the Dow Jones Industrial Average.^[2] A split divides each share into ten and cuts the price to roughly a tenth, so the total value of the company is unchanged; what changes is the price of a single share and the number of shares on the market.

At its Computex 2024 conference Nvidia said it would move GPU generations from a two-year to a one-year cadence, and announced Blackwell Ultra and the Rubin architecture.^[2]

Where the money came from

The valuation rested on data-center GPUs. In the quarter reported in May 2024, Nvidia's revenue rose 262% to $26.04 billion, and revenue from data centers grew 427% to $22.6 billion.^[2] Data-center sales therefore made up the great majority of the company's quarterly revenue, which is why the share price and the build-out of AI computing moved together.

Why it matters

Only Microsoft and Apple had previously reached a $3 trillion market value, and both took years to travel from $1 trillion; Nvidia covered the same distance in about a year.^[1][2] The quarterly figures show where that money came from: data-center chips, rather than games or other markets.^[2] The one-year cadence announced at Computex 2024 also changed what buyers could plan for, with new GPU architectures arriving on an annual rhythm instead of every two years.^[2]