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Microsoft regains title of world's most valuable company

2024.07.04 06:21:18 Yuchan Shim

[Microsoft. Photo Credit to Pxhere]

Microsoft has reclaimed the title of the world's most valuable public company merely days after being overtaken by Nvidia.

The American technology giant, renowned for its software products such as Windows operating systems and Microsoft 365 applications, was founded by Bill Gates and Paul Allen in 1975.


Microsoft has been instrumental in advancing the technology industry, driving innovation with iconic products like Windows and Microsoft Office.


On June 18th, Microsoft lost its position as the world’s most valuable firm to Nvidia, a company celebrated for manufacturing graphics processing units and pioneering AI technology.


Nvidia briefly held the top spot with a stock market valuation of $3.34 trillion.


However, Microsoft managed to regain the status, with Nvidia’s market value dropping to around $3.22 trillion, while Microsoft’s valuation remained steady at more than $3.3 trillion.


Nvidia’s rapid rise in value was largely due to its investments in developing AI products.


They experienced a 1,000% surge in share price since October 2022.


This steep increase has led to mixed expert opinions on whether Nvidia can sustain its high valuation.


Some analysts foresee continued growth, while others caution that the company may be overvalued.


Nvidia benefited significantly from a Bitcoin frenzy in 2020, which saw a surge in sales of their graphics cards.


Additionally, their value skyrocketed even further as the company’s technology started to be recognized as the engine behind an explosion in AI.


This increase has also lifted co-founder and CEO Jensen Huang’s net worth to around $117 billion, placing him among the top 11 wealthiest individuals globally.


The 61-year-old Huang has attracted huge interest ever since his company’s emergence as one of the leading developers of AI chips.


Brian Colello, an equity strategist for the financial services firm Morningstar, stated, "Nvidia dominates AI today and the sky is the limit for the company's profitability if it can maintain this lead over the next decade.”


However, he also mentioned, “Any semblance of the successful development of alternatives could meaningfully limit Nvidia's upside," highlighting the fact that Nvidia’s value may not rise more.


While Microsoft’s shares also experienced a slight decline, they still ended with a higher value than Nvidia.


The competition for becoming the richest company is not only between Nvidia and Microsoft.


Apple, another technology giant founded in 1976, is also in the race.


Apple has profoundly influenced the electronics industry with innovative products such as the iPhone.


For the past few years, Apple and Microsoft have been the main contenders until Nvidia joined the mix.


All three companies are valued at more than $3 trillion and are competing to reach the $4 trillion milestone.


Many experts predict that these companies could hit the $4 trillion mark by the end of next year.


Nvidia’s recent rapid ascent has intensified the competition, making the race for the title of the world’s most valuable company more thrilling.


It remains to be seen who will emerge victorious in this high-stake battle.

Yuchan Shim / Grade 10
Cornerstone Collegiate Academy of Seoul