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Nvidia Tops Microsoft as World’s Most Valuable Company with $3.45 trillion Market Cap

Nvidia's PEG ratio of under 0.9 marks it as the most attractively valued among the Magnificent Seven tech giants relative to its growth

Freepik
The AI chip maker, Nvidia, rallied 24% in the last one month Freepik

Nvidia Corp. surpassed Microsoft to become the world’s most valuable company for the first time after January 24. The AI chip maker rallied 24% in the last one month to close Tuesday’s session with a market capitalisation of $3.45tn, surpassing $3.44tn of Microsoft.

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Recovery in the Nvidia's stock and subsequent upmove over the last two months added $1tn to its market capitalisation.

The chip-maker’s revenue for the quarter under review registered a growth of 69% to $44.06bn, and its earnings per share were $0.96 during the same period. The company defied the expectations on both these metrics.

Nvidia's latest earnings report eased major investor concerns, particularly over whether US export restrictions on advanced chips to China would disrupt its strong revenue momentum, AI investment trends, and its ability to scale production of the new Blackwell GPUs.

Even with its sharp share price gains, Nvidia is trading at just about 29 times its projected earnings. In comparison, the Nasdaq 100 is valued at 26 times earnings, despite much lower growth expectations than Nvidia.

Its price-to-earnings-to-growth (PEG) ratio stands below 0.9, the lowest among the ‘Magnificent Seven’, which includes Apple, Amazon, Alphabet, Tesla, and Meta, CNBC-TV 18 said in a report. This makes Nvidia look attractively valued relative to its growth potential.

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While China made up 13% of Nvidia’s revenue last quarter and ongoing US-China tensions still pose a threat, the company is mitigating this exposure through new purchase agreements with Middle Eastern nations, reportedly signed during US President Donald Trump’s recent visit.

Key customers like Microsoft, Meta, Alphabet, and Amazon are responsible for over 40% of Nvidia’s revenue, and are maintaining strong investment in AI infrastructure. Combined capital expenditures for these firms are projected to reach $330bn by 2026, up 6% from this year’s estimated outlay, the CNBC-TV18 report cited Bloomberg data.

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