Microsoft has reclaimed its position as the world’s most valuable public company, just days after being overtaken by one of its competitors. On Thursday, computer chip maker Nvidia saw a drop of 3.5% in its shares, causing its market value to decrease to $3.2 trillion (£2.5 trillion) in the US. Meanwhile, Microsoft’s shares also experienced a slight decline, but the company still ended the day’s trading with a worth of $3.3 trillion (£2.6 trillion).
Currently, Microsoft, Nvidia, and Apple are in a close race for the top spot, with analysts predicting that they are also vying to become the first company to reach a market value of $4 trillion (£3.2 trillion). Nvidia’s recent success can be attributed to its investment in developing artificial intelligence (AI) products, which has resulted in a significant increase in share prices since October 2022. This led the company to claim the title of the world’s most valuable company on Tuesday, with a market value of over $3.3 trillion (£2.6 trillion).
However, while some experts believe that Nvidia’s success will continue to soar, others have expressed concerns that the company may be overvalued. One key factor to monitor is whether Nvidia can maintain its dominance in the AI market, or if its competitors will catch up by heavily investing in this field. Gil Luria, an analyst from investment bank D.A. Davidson, stated, “The caution on Nvidia comes from the longer-term outlook. This type of performance is very hard to maintain.” Similarly, Brian Colello from financial services firm Morningstar warned, “Nvidia dominates AI today and the potential for profitability is limitless if it can sustain its lead over the next decade. However, the successful development of alternatives could significantly limit Nvidia’s potential for growth.”
In other business news, popular video-sharing app TikTok has issued a warning that it may face a ban in the United States if it is not granted freedom of speech protections. In addition, for the seventh consecutive time, interest rates have been held steady. Finally, Sainsbury’s has sold its banking arm to NatWest, as part of its efforts to focus on its core retail business.