Microsoft regains top position as most valuable company, Nvidia slides.

Nvidia yielded its position as the world’s most valuable company back to Microsoft as its stock dropped more than 3.5% on Thursday. The AI chip leader briefly claimed the top spot on Tuesday with a market valuation of $3.34 trillion (£2.64 trillion). However, Nvidia’s shares fell to $130.78 by Thursday, reducing its market value to approximately $3.22 trillion, while Microsoft retained its leadership with a stable valuation exceeding $3.3 trillion.

Nvidia’s ascent has been driven by its dominance in what analysts describe as the “new gold or oil in the tech sector” – the chips powering AI. Nvidia, Microsoft, and Apple, each valued over $3 trillion, are locked in a competitive race to be the world’s most valuable company. Despite Nvidia’s brief tenure at the top, analysts foresee intense competition among these tech giants.

“We believe over the next year the race to $4 trillion market cap in tech will be front and center between Nvidia, Apple, and Microsoft,” noted Wedbush Securities in a recent report.

Nvidia’s stock surge has been fueled by rising demand for chips used in training and deploying generative AI models like OpenAI’s ChatGPT. The company also benefited significantly from increased sales of its graphics cards during the 2020 Bitcoin mining rush.

The rise of Nvidia has paralleled the growing prominence of its CEO, Jensen Huang, who enjoys celebrity status in his native Taiwan, often likened to a rock star by his admirers.