Nvidia has become the dominant player in the AI space, driven by its state-of-the-art GPUs, which are essential for running advanced AI applications. In the high-margin GPU category designed for AI and accelerated computing, Nvidia currently controls about 90% of the market. Competitors like Advanced Micro Devices and Intel are striving to enhance their capabilities in the ultra-high-performance GPU sector, but analysts believe Nvidia will maintain its significant strength in this field. With impressive performance and expectations for further explosive growth, Nvidia's stock has surged by 240% in the past year and 82% in 2024 so far. As a result, its market cap has reached approximately $2. 27 trillion, making it the world's third-most valuable company and a member of the "Magnificent Seven. " While Apple holds second place with a market cap of $2. 65 trillion, Microsoft leads the pack with an approximate value of $3. 12 trillion. Given these achievements, could Nvidia soon become the world's most valuable company? The influential player in AI reaps the rewards Since late 2022, groundbreaking advancements in AI technologies have been emerging rapidly. This progress accelerated significantly in 2023 and shows no signs of slowing down this year. Businesses and institutions wanting to tap into the AI space have created a soaring demand for Nvidia's advanced processors. Consequently, its sales and earnings have skyrocketed. In the fourth quarter of the previous year, the company's sales grew by 265% compared to the previous year, reaching $22. 16 billion.

Thanks to a remarkable performance surge in the second half of 2023, Nvidia's annual sales soared by 126% to $60. 9 billion. Last year, Nvidia generated $29. 76 billion in net income, equivalent to 49% of its total sales. This exceptional net income margin is rare for a hardware-oriented business, as they typically have lower margins compared to software-oriented counterparts due to the higher costs of producing physical goods. Nonetheless, Nvidia's extraordinary margins reflect the high demand for its GPUs at present. While it's reasonable to anticipate a moderation in growth, the company seems poised for faster expansion in the next few years compared to Apple and Microsoft. Although Apple and Microsoft generate significantly more revenue and net income than Nvidia, the chip powerhouse remains well-positioned to be the biggest beneficiary of the AI revolution, having grown at a much faster pace than these tech giants. Microsoft experienced a sales growth of approximately 10% over the past 12 months, with a 20% increase in net income. On the other hand, Apple's revenue remained flat during that period, but its net income rose by 7%. If the demand for AI services continues to surge, there is a good chance that Nvidia will surpass Apple's market cap within the next five years and dethrone Microsoft as the world's most valuable company. While Nvidia's business has historically been affected by cyclical trends, it appears to be in the early stages of benefiting from the unfolding AI revolution. At present, Nvidia is capitalizing on an unprecedented technology, making it challenging to accurately predict its performance over the next five years. However, given its exceptional sales and earnings momentum and the overall excitement surrounding AI applications, it would not be surprising to witness Nvidia claiming the title of the world's most valuable business.