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Nvidia Slips as Microsoft Reclaims Title of Most Valuable Company

A 3% drop in Nvidia shares shifts market leadership back to Microsoft
June 21, 2024

Nvidia's shares took a notable hit on Thursday, falling by nearly 3.4%, which allowed Microsoft to regain its position as the world’s most valuable company.

Earlier this week, Nvidia’s market capitalization had briefly surpassed Microsoft’s, but the drop in Nvidia’s share price to $131.88 reduced its market value by approximately $91 billion, bringing it down to $3.34 trillion. Meanwhile, Microsoft’s market cap, although also experiencing a decline, stood at $3.30 trillion as its shares dipped by 0.4% to $444.80.

The competition for the title of the world's most valuable company is fierce, with Apple also in the running. The iPhone maker’s market capitalization was $3.22 trillion, with shares trading down 2.2% at $210.10 in afternoon trading.

The tech landscape remains dynamic, influenced by developments such as Elon Musk’s announcement regarding his xAI startup. Musk revealed that Dell and Super Micro are providing server racks for the startup’s supercomputer, which aims to enhance the capabilities of its AI tool, Grok. Both Dell Technologies and Super Micro Computer saw minor declines, with their shares down 1% and 0.7%, respectively. These companies utilize Nvidia chips in their servers, tapping into the growing demand for processors that drive AI applications.

Musk previously disclosed that training the Grok 2 model required around 20,000 Nvidia H100 graphic processing units (GPUs), with future models expected to need up to 100,000 Nvidia H100 chips. 

“Nvidia’s profitability in the AI sector is unmatched, which is why the company remains a key player,” stated Jake Dollarhide, CEO of Longbow Asset Management. Nvidia’s stock price has surged nearly threefold this year, significantly contributing to broader market gains. Similarly, Super Micro shares have more than tripled, and Dell’s stock has risen nearly 95%.

The Philadelphia SE Semiconductor Index has also seen substantial growth, climbing nearly 34% since its recent low in April and achieving a record high on Tuesday.

Dan Ives, an analyst at Wedbush Securities, highlighted the increasing strength of tech giants: “AI technology will continue to empower major tech companies like Microsoft, Oracle, Dell, and Amazon to capitalize on their extensive enterprise bases, while consumer tech leaders such as Meta, Apple, and Google will also see significant benefits.”

The ebb and flow of market values among these tech giants underscore the intense competition and rapid evolution within the technology sector, driven by advancements in AI and strategic corporate moves.

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