Nvidia’s Stock Drops 3%, Losing First Place to Microsoft

With shares trading at $130.78, Nvidia’s market value dropped to $3.22 trillion on Thursday, a notable decrease of about 3.5%. Nvidia lost its ranking as the most valuable corporation in the world to Microsoft as a result of this downturn.

Microsoft overtook Nvidia in the afternoon session, despite a minor decline in market value to $3.30 trillion and a 0.4% decline in share price to $444.8. The rankings of the most valuable firms in the world have changed significantly as a result of this adjustment.

In related news, Elon Musk declared on his social media platform X that Super Micro Computer and Dell Technologies are now supplying server racks for his AI firm, xAI, supercomputer. The purpose of this supercomputer is to improve Grok, the AI tool it uses. Shares of Super Micro Computer and Dell Technologies dropped by 0.7% and 1%, respectively, after Musk’s comments.

These businesses build servers featuring Nvidia CPUs, which are highly sought after for AI applications. Musk disclosed earlier this year that approximately 20,000 Nvidia H100 GPUs were needed for training the Grok 2 model, and that 100,000 Nvidia H100 chips were anticipated for future models, such as Grok 3.

The CEO of Longbow Asset Management, Jake Dollarhide, highlighted Nvidia’s noteworthy gains in artificial intelligence by saying, “While Microsoft invests in and earns money from AI, Nvidia only makes money—and plenty of it. Because of this, Nvidia cannot be spelled without AI.” This year, Nvidia’s stock price has almost tripled, propelling advances in the market as a whole. In a similar vein, the stock of Dell has increased by almost 95% and that of Super Micro has more than tripled. The Philadelphia SE Semiconductor Index hit a record high on Tuesday, up by about 34% since April.

Dan Ives, an analyst at Wedbush Securities, noted “This will be a tech market in which the strong will get stronger as AI technology helps Big Tech stalwarts monetize their massive installed bases across the enterprise (Microsoft, Oracle, Dell, Amazon, etc.) and consumer landscape (Meta, Apple, Google) over the coming years.”

Nvidia suffered a huge loss, despite having recently overtaken Microsoft in market capitalization. After dropping from its previous closing value of $3.34 trillion to $131.88, Nvidia’s shares saw a loss in market value of almost $91 billion.