Nvidia loses top spot to Microsoft after 3% drop | Tech News

Nvidia loses top spot to Microsoft after 3% drop

Nvidia's shares declined nearly 3.4% on Thursday, handing the title of the world's most valuable company back to Microsoft.

| Updated on: Jun 21 2024, 16:40 IST
Nvidia loses top spot to Microsoft after 3% drop
A person walks pass a Nvidia logo at Computex in Taipei, Taiwan June 5, 2024. REUTERS/Ann Wang/File Photo (REUTERS)

Nvidia's shares declined nearly 3.4% on Thursday, handing the title of the world's most valuable company back to Microsoft.

Nvidia, whose market capitalization surpassed that of Microsoft on Tuesday, was set to lose around $91 billion to its last closing market value of $3.34 trillion, at the current level of $131.88.

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Microsoft's market value also slipped, to $3.30 trillion, as its shares were down 0.4% at $444.8 in afternoon trading.

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Nvidia, Microsoft and Apple are in a three-horse race to become the world's most valuable company. The Tim Cook-led iPhone maker's market capitalization was at $3.22 trillion, with its shares down 2.2% at $210.10 in the afternoon.

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Elon Musk said on his X social media platform on Wednesday that Dell and Super Micro are supplying server racks for the supercomputer of his xAI startup, which will be used to expand the capabilities of its AI tool, Grok.

Dell Technologies and Super Micro Computer fell 1% and 0.7%, respectivel

The companies make servers equipped with Nvidia chips, enabling them to capitalize on the surging demand for processors that power virtually every AI application.

Musk said earlier this year that training the Grok 2 model took about 20,000 Nvidia H100 graphic processing units and that the Grok 3 model and beyond would require 100,000 Nvidia H100 chips.

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"While Microsoft both spends and makes money in AI, Nvidia only makes money and lots of money and profits in AI. That's why you cannot spell Nvidia without AI," said Jake Dollarhide, chief executive officer, Longbow Asset Management.

Nvidia's stock price has nearly tripled so far this year, powering the gains in the broader market. Super Micro shares have more than tripled in value during the same period, while Dell's stock is up nearly 95%.

The Philadelphia SE Semiconductor Index has risen nearly 34% since the most recent low in April and closed at a lifetime high on Tuesday.

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"This will be a tech market in which the strong will get stronger as AI technology helps Big Tech Stalwarts monetize their massive installed bases across the enterprise (Microsoft, Oracle, Dell, Amazon, etc) and consumer landscape (Meta, Apple, Google) over the coming years," said Wedbush Securities analyst Dan Ives.

(Reporting by Yuvraj Malik and Zaheer Kachwala in Bengaluru; Additional reporting by Medha Singh; Editing by Sriraj Kalluvila and Pooja Desai)

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First Published Date: 21 Jun, 16:40 IST