Nvidia Reclaims Crown As World's Most Valuable Firm, Surpasses Microsoft

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Nvidia shares surged to an all-time high on Wednesday reclaiming its position as the world's most valuable company
Nvidia shares surged to an all-time high on Wednesday, reclaiming its position as the world's most valuable company, after an analyst highlighted the chipmaker's potential to capitalize on a 'Golden Wave" of artificial intelligence.
Nvidia shares surged 4.3% on Wednesday to close at $154.31, surpassing its previous all-time high set in January. This latest rally marks a major milestone for the chipmaker, which has soared 63% since its April low, adding nearly $1.5 trillion in market capitalisation over that period.
With this sharp gain, Nvidia officially overtook Microsoft to become the world's most valuable publicly traded company, commanding a market cap of about $3.77 trillion compared to Microsoft's $3.66 trillion.
Earnings and AI Demand Fuel Bullish Sentiment
Nvidia's recent earnings report acted as a major catalyst, highlighting not just robust revenue growth but also strong forward guidance — all this despite the ongoing curbs on advanced semiconductor sales to China.
Adding to the positive sentiment, strong results from major tech clients such as Microsoft, Meta Platforms, Alphabet, and Amazon — which collectively account for over 40% of Nvidia's revenue, according to Bloomberg supply chain data — suggest that these firms are continuing to aggressively invest in AI infrastructure.
Confidence Among Investors and Analysts
'Nvidia's moat has only widened and deepened — its momentum is clearly back," said Michael Smith, co-portfolio manager at Allspring Global Investments. 'The AI arms race looks set to continue into 2025 and possibly 2026."
From Obscurity to Wall Street's Favorite
Once a relatively obscure name, Nvidia has become a central figure in the artificial intelligence boom. Its stock is up 15% so far in 2025, building on an astonishing rally of over 170% in 2024 and 240% in 2023.
Despite these massive gains, Nvidia remains attractive by several valuation metrics. The stock currently trades at 31.5 times its expected 12-month earnings — below its 10-year average and not far from the Nasdaq 100's multiple of 27. Its PEG ratio, a key measure comparing price to earnings growth, stands at 0.9, the lowest among the 'Magnificent Seven" tech giants.
This blend of rapid growth and reasonable valuation helps explain Wall Street's enthusiasm. Nearly 90% of analysts tracked by Bloomberg rate Nvidia a 'Buy," and the stock still trades about 12% below the average analyst price target, implying further upside potential.
Institutional Buying May Still Be Coming
Interestingly, Nvidia remains under-owned by institutional investors when compared to other tech heavyweights. According to Bank of America, Nvidia is held by 74% of long-only funds — below Amazon, Apple, and Microsoft, which leads the pack with 91% ownership.
'I'm bullish on this year and next, but longer-term visibility is uncertain," added Smith. 'Even if the stock doesn't look expensive today, the size of the company could limit how much further it can go. Much depends on how long its customers keep spending heavily on AI. If that slows, the stock could see a swift shift in sentiment and volatility."
First Published:
June 26, 2025, 09:08 IST