Nvidia overtakes Microsoft with $3.5t valuation

Nvidia surpassed Microsoft in market capitalization on June 3, 2025, becoming the most valuable publicly traded company in the world.

The chipmaker’s shares rose 3% to US$141.40, giving it a market cap of US$3.45 trillion, slightly ahead of Microsoft’s US$3.44 trillion.

This shift follows a nearly 24% surge in Nvidia’s stock over the past month, despite concerns regarding export controls and tariffs.

Nvidia, Microsoft, and Apple have alternated positions at the top of the market capitalization rankings since June 2024.

Nvidia last held the top spot on January 24, 2025.

Nvidia’s growth is significantly driven by its AI chips, which are used by companies including OpenAI, Microsoft, Google, and Meta for developing advanced AI technologies.

🔗 Source: CNBC

🧠 Food for thought

1️⃣ Nvidia’s market leadership reflects unprecedented AI chip dominance

Nvidia’s rise to the world’s most valuable company stems from its extraordinary control of 70-95% of the AI accelerator market, creating a near-monopoly in the critical infrastructure powering the AI revolution 1.

This dominance translates to exceptional financial performance, with Nvidia maintaining a 78% gross margin, nearly double what competitors like Intel (41%) and AMD (47%) achieve with their chip portfolios 1.

The company’s CUDA software platform creates significant switching costs for customers, effectively locking them into Nvidia’s ecosystem and making it difficult for enterprises to adopt competing solutions 2.

Even as companies like AMD launch competing products such as the MI300 GPU series, Nvidia’s entrenchment remains secure, with AMD holding under 15% market share despite significant investment 3.

This concentration of market power in a single company is particularly notable given that the AI chip market is projected to grow from $20 billion in 2020 to more than $300 billion by 2030 4.

2️⃣ Export controls and tariffs create strategic challenges despite market strength

While Nvidia has maintained its growth trajectory, it operates in an increasingly complex geopolitical environment where US export controls directly target advanced semiconductor technologies 5.