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Outbyte Driver Updater FREEScan for outdated or missing drivers - takes under a minuteDriver Scan →Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Nvidia overtook Microsoft on June 18, 2024, to become the world’s most valuable publicly traded company by equity market capitalization. Nvidia closed at approximately $135.58 a share, valuing the company at about $3.335 trillion, compared with Microsoft’s $3.317 trillion. Apple ranked third at roughly $3.286 trillion. The lead was only about $18 billion—a market snapshot, not a permanent takeover—and Microsoft regained first place within days.
The milestone showed how strongly investors expected artificial-intelligence infrastructure spending to benefit Nvidia. It did not mean Nvidia had greater revenue, profit, assets, employees or overall economic importance than Microsoft.
What happened on June 18, 2024?
Nvidia’s shares rose approximately 3.5% that day and finished at about $135.58. At the reported close, its equity market capitalization reached approximately $3.335 trillion, narrowly exceeding Microsoft’s $3.317 trillion. Apple was valued at about $3.286 trillion. Reuters’ event report is available through Investing.com.
Market capitalization is broadly calculated as a company’s share price multiplied by its shares outstanding. Because share prices move continuously, rankings can change intraday, at the closing bell, at month-end or at quarter-end. A one-day closing lead is not the same thing as durable leadership.
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What the ranking did—and did not—measure
- It measured: the market value investors assigned to Nvidia’s publicly traded equity.
- It did not measure: revenue, net income, assets, cash flow, workforce, enterprise value or the size of either company’s economic footprint.
- It did not establish: that Nvidia was a safer, cheaper or more suitable investment than Microsoft.
Why Nvidia’s valuation rose so quickly
Investors were positioning Nvidia as the primary supplier of the computing infrastructure needed to train and run many generative-AI systems. Cloud providers and technology companies were building data centers and buying large quantities of high-performance accelerators. Contemporary reporting said demand for Nvidia’s processors substantially exceeded available supply, while Nvidia repeatedly surpassed already-elevated market expectations. See the Reuters account.
Three forces behind the repricing
- Accelerator demand: AI workloads require substantial parallel computing, making data-center GPUs and related systems strategic components rather than optional add-ons.
- Large capital budgets: Microsoft, Meta, Alphabet and other companies were competing to expand AI capacity, creating a powerful near-term spending cycle.
- Expectations of persistence: The share price reflected not only current results but also the belief that AI infrastructure investment would continue for years.
Reuters reported that Nvidia’s market value climbed from approximately $1 trillion to $2 trillion in nine months, then from $2 trillion to $3 trillion in just over three months. That pace combined genuine operating momentum with substantial expectations about future growth.
What Nvidia actually sells
Nvidia was once identified mainly with gaming graphics processors. By 2024, the market was focused on a broader data-center platform: accelerators, networking equipment, complete systems and software used to deploy AI workloads.
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Its CUDA software ecosystem helped developers optimize applications for Nvidia hardware, making the company’s position more than a contest over a single chip’s specifications. The practical offering was an integrated hardware-and-software stack for AI training and inference.
Nvidia was not an AI application company and did not “own” artificial intelligence. It supplied tools used by companies building models, cloud services and applications. The market was rewarding the infrastructure layer because it could monetize spending before many application businesses had proven how much profit AI products would generate.
Why the data-center business mattered
Nvidia’s business was shifting from consumer electronics toward hyperscale and enterprise infrastructure. Data-center growth had become the central explanation for the company’s valuation, while gaming remained an important but much slower-growing legacy business.
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That exposure also created dependencies. Nvidia’s results relied heavily on continued capital expenditure by major cloud and technology customers, access to foundry and advanced-packaging capacity, and the ability to deliver successive accelerator generations. Customer concentration and the possibility of a synchronized spending pause meant that extraordinary growth could also produce extraordinary sensitivity to a change in the cycle.
Nvidia versus Microsoft: different ways to monetize AI
| Nvidia | Microsoft |
|---|---|
| Semiconductor and AI-infrastructure supplier | Cloud, software, enterprise and AI-services provider |
| Benefits when many organizations buy accelerators, networking and systems | Benefits from Azure consumption, software subscriptions and adoption of Copilot and other services |
| Highly exposed to AI capital-spending cycles and semiconductor competition | More diversified recurring-revenue model across enterprise software and cloud |
| Competitive advantage includes its hardware-software ecosystem | Competitive advantages include distribution, enterprise relationships, Azure and its OpenAI relationship |
Microsoft’s scale and diversification did not disappear when Nvidia passed it. Microsoft remained a broad software and cloud business with recurring revenue, while Nvidia was the more concentrated beneficiary of a rapidly expanding infrastructure buildout.
Was Nvidia’s lead justified?
Arguments supporting the valuation
- Exceptional demand for high-end AI accelerators and systems.
- Limited near-term alternatives for customers seeking top-tier performance.
- Rapid revenue and earnings growth that repeatedly exceeded forecasts.
- Switching costs associated with Nvidia’s software ecosystem.
- Cloud providers’ willingness to spend heavily on AI capacity.
- A product roadmap supplying new accelerator generations and complete systems.
Reasons investors remained cautious
- The price assumed that AI spending would remain unusually strong.
- Cloud companies were developing custom chips and evaluating AMD, Intel and other alternatives.
- A slowdown in data-center construction could affect Nvidia disproportionately.
- Export controls could restrict sales to important markets.
- Power, cooling and data-center availability could constrain deployments.
- Some AI value could migrate from hardware toward applications, or model efficiency could reduce compute needs for particular workloads.
- Semiconductor cycles and valuation compression could magnify a slowdown in earnings growth.
A high-growth valuation leaves less room for execution mistakes. Contemporary coverage quoted warnings that even a small misstep could produce a major correction and that an AI-spending slowdown could reverse the rally. Those are risks to evaluate with current filings and guidance, not conclusions that can be settled by the 2024 ranking alone.
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The stock split did not make Nvidia cheaper
Nvidia’s 10-for-1 stock split became effective June 7, 2024. The split reduced the nominal price of each share and increased the share count proportionally; it did not change market capitalization or the company’s underlying value. The event was reported in Reuters coverage.
A lower per-share price can make a stock appear more accessible to individual investors, but valuation should be assessed using market capitalization, earnings, cash flow and relevant multiples—not the share price alone.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Why Nvidia mattered to the wider market
Reuters reported that Nvidia represented approximately 16% of trading in S&P 500 companies at the time, with average daily turnover near $50 billion, compared with roughly $10 billion each for Apple, Microsoft and Tesla. That was a June 18, 2024 observation, not a permanent statistic.
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At that level of activity, Nvidia became a proxy for confidence in the AI investment cycle. Its moves affected major indexes, passive funds and technology-sector sentiment even when the operating results of other companies had not changed. The concentration also meant that a sharp Nvidia decline could transmit through portfolios that did not directly own the stock.
The lead was temporary: the subsequent chronology
- June 5, 2024: Nvidia passed Apple to become the second-most-valuable company while Microsoft remained first, according to Reuters reporting.
- June 18, 2024: Nvidia passed Microsoft at the reported close, reaching approximately $3.335 trillion.
- June 20, 2024: Microsoft regained first place after Nvidia shares declined, as reported by Investing.com.
- October 25, 2024: Nvidia briefly passed Apple again while Microsoft remained below Nvidia in the Reuters-reported ranking; see the report.
- June 2025: Nvidia again reclaimed the lead and ended the month at approximately $3.86 trillion versus Microsoft’s $3.69 trillion, according to Reuters coverage.
What the milestone says about the AI economy
The event marked a change in where investors believed AI value would appear first. Chips, memory, networking, servers, data centers and cloud platforms formed an infrastructure chain supporting applications. Nvidia was seen as monetizing that chain immediately, while software companies were still proving how extensively customers would pay for AI features.
The deeper lesson is not that a chip company became more important than a software company in every sense. It is that the market repriced the infrastructure required to support the AI boom—and did so in a ranking that could change with the next trading session.
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