Nvidia surpasses Microsoft to become most valuable company again

June 4, 2025 — In a historic shift that underscores the seismic impact of artificial intelligence (AI) on global markets, Nvidia Corp. has surpassed Microsoft to once again become the world’s most valuable publicly traded company. The chipmaker’s market capitalization surged past the $3.45 trillion mark, slightly edging out Microsoft, which now holds a valuation around $3.43 trillion.

This milestone marks Nvidia's continued ascent as the key driver of the AI revolution, bolstered by robust demand for its GPUs and AI-centric computing infrastructure.

Unprecedented Growth Fueled by AI Boom

Nvidia’s rise has been nothing short of meteoric. Its stock has more than tripled over the past 12 months, reflecting investor enthusiasm for its critical role in powering large language models, cloud-based AI services, and enterprise applications.

“Nvidia is no longer just a chip company. It’s the backbone of the AI infrastructure,” said Dan Ives, Managing Director at Wedbush Securities. “Every major cloud and tech company relies on Nvidia’s ecosystem. It’s becoming the ‘Microsoft of AI’.”

In its most recent quarterly earnings, Nvidia posted a revenue of $26.2 billion, up 262% year-over-year, driven by record data center sales. Its net income surged to $14.9 billion, far exceeding analyst expectations.

Microsoft’s Steady Strength, But AI Spotlight Shifts

While Microsoft continues to dominate across cloud computing, enterprise software, and productivity solutions, Nvidia's laser focus on AI hardware has turned it into the centerpiece of the next phase of tech growth.

Microsoft has aggressively invested in AI through its partnership with OpenAI and integration of AI tools into its Office and Azure platforms. However, Nvidia’s tangible leadership in the hardware powering those AI systems appears to be reaping the biggest rewards.

“This isn’t a fall for Microsoft — it’s a rise for Nvidia,” said Gene Munster, managing partner at Deepwater Asset Management. “Microsoft has been a key player in AI, but Nvidia is the arms dealer in a booming gold rush.”

Market Context: Tech Giants Jostling for the Top

The battle for the top valuation among tech giants has intensified in recent years. Apple, which held the crown for over a decade, was surpassed by Microsoft in early 2024, and now both companies have been eclipsed by Nvidia.

On June 3, Nvidia’s shares closed at $1,368.42, up nearly 5% for the day, giving it the highest market cap globally. Its rally reflects investor confidence in AI infrastructure and future earnings potential, particularly as demand continues from cloud hyperscalers, defense, automotive, and healthcare sectors.

“Investors are increasingly aligning their portfolios with the AI megatrend,” said Laura Martin, tech analyst at Needham & Co. “Nvidia is the purest play in that space.”

Implications for Investors and the Broader Market

Nvidia’s rise is likely to have a cascading effect across global indices. Its weight in major ETFs like the S&P 500 and Nasdaq-100 has increased substantially, influencing both passive and active investment strategies.

“Nvidia has become a bellwether not just for tech, but for the entire market’s sentiment on AI,” said David Kostin, Chief U.S. Equity Strategist at Goldman Sachs.

Analysts caution, however, that while growth prospects remain strong, valuation risks must be monitored. Nvidia now trades at a forward P/E ratio above 50, significantly higher than many of its peers.

For long-term investors, the key lies in sustained demand and innovation. Nvidia’s upcoming roadmap, including its Blackwell GPU architecture, is expected to solidify its performance edge well into 2026.

Outlook: Is This the New Normal?

Nvidia’s return to the top spot may not be fleeting. Unlike past tech cycles, where hardware providers faded behind platforms, Nvidia has succeeded in embedding itself across every layer of AI deployment — from chips to full-stack software like CUDA and TensorRT.

If AI adoption continues on its current trajectory, analysts believe Nvidia could maintain its lead, especially with competitors like AMD and Intel still playing catch-up.

Still, some market watchers advise caution. “The pace of Nvidia’s rise is astonishing, and history reminds us that trees don’t grow to the sky,” said Richard Bernstein, CEO of RBA. “There could be turbulence ahead if growth expectations falter.”

Nvidia Redefines Market Leadership in the AI Era

Nvidia's resurgence as the most valuable company globally is emblematic of the new economic order driven by artificial intelligence. While Microsoft and Apple remain formidable forces, Nvidia’s focus on next-generation computing has reshaped what it means to be a market leader in 2025.

For now, the crown sits with Nvidia — a company that has not only ridden the AI wave but helped shape it. As AI becomes increasingly central to innovation, the market appears to be rewarding those building the foundation, not just the applications.

Investors will be watching closely to see whether Nvidia’s momentum can be sustained, or if the leadership baton will continue to pass among tech’s titans.