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Nvidia's ( NVDA ) market cap reaches over $3.3 trillion as stock

rallies

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Demand for Nvidia's ( NVDA ) AI chips outstrips supply

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Nvidia's ( NVDA ) stock has surged about 173% so far this year

(Updates with details of market capitalizations, earnings

valuations and background on AI rally)

June 18 (Reuters) - Nvidia ( NVDA ) became the world's

most valuable company on Tuesday, dethroning tech heavyweight

Microsoft ( MSFT ) as its high-end processors play a central

role in a race to dominate a surge in artificial intelligence

technology.

Shares of the chipmaker climbed 3.5% to $135.60, lifting its

market capitalization to $3.336 trillion, just days after

overtaking iPhone maker Apple ( AAPL ) to become the second most

valuable company.

Microsoft's ( MSFT ) stock market value was $3.325 trillion as its

shares dipped 0.2%.

Apple's ( AAPL ) stock slipped 1.3%, putting its value at $3.278

trillion.

Nvidia's ( NVDA ) stock has surged about 173% so far this year,

compared with a rise of about 19% in Microsoft ( MSFT ) shares, with

demand for its top-of-the-line processors outpacing supply. Tech

giants Microsoft ( MSFT ), Meta Platforms ( META ) and Google-owner

Alphabet are competing to build out their AI computing

capabilities and dominate the emerging technology.

Tuesday's gain lifted Nvidia's ( NVDA ) stock to a record high and

added over $103 billion to its market capitalization.

Nvidia ( NVDA ) commands more than 80% of the market share for AI chips,

making it a major winner from surging AI development.

Since its blowout forecast about a year ago, the company has

consistently breezed past Wall Street's lofty expectations for

revenue and profit, with demand for its graphics processors far

outstripping supply as companies rush to embed AI applications.

Nvidia ( NVDA ) executives said in May that demand for its Blackwell

AI chips could exceed supply "well into next year."

Increasing the appeal for its highly valued stock among

individual investors, Nvidia ( NVDA ) recently split its stock

10-for-one, effective June 7.

"A stock split can reduce the price per share, making it

more affordable for individual investors to buy. With Nvidia ( NVDA )

doing a 10:1 stock split, retail investors are the real winners

here," said Sam North, market analyst at investment platform

eToro.

The company's market value expanded from $1 trillion to $2

trillion in just nine months in February, while taking just over

three months to hit $3 trillion in June.

Sharp increases in analysts' expectations for Nvidia's ( NVDA )

future earnings have outpaced its stellar stock gains, resulting

in a fall in the stock's earnings valuation.

Nvidia ( NVDA ) is trading at 44 times expected earnings, down from

over 84 times expected earnings about a year ago, LSEG data

showed.