On June 18th, the closing price rose by 3.51% to $135.58, and the market value reached $3.34 trillion, surpassing [Microsoft] to become the highest market value company in the world. As of closing, Nvidia's market value was $3.32 trillion, and the third-ranked market value was $3.29 trillion. Nvidia's rise is very eye-catching. According to Dow Jones Market Data, five years ago, Nvidia's market cap ranking had not entered the top 20, one year ago, the company's market cap ranking was fifth, and two years ago it was ranked tenth. $NVIDIA (NVDA.US)$$Microsoft (MSFT.US)$Please use your FUTUBULL account to access the feature.$Apple (AAPL.US)$

Nvidia's rise is very eye-catching. According to Dow Jones Market Data, five years ago, Nvidia's market cap ranking had not entered the top 20, one year ago, the company's market cap ranking was fifth, and two years ago it was ranked tenth.

Since 2001, only five other companies have won the title of most valuable company in the US, which are Microsoft, Apple, [Amazon], and General Electric before the spin-off, and during this period, Apple has held this crown for the longest time, in 2019, the most valuable company Amazon held the crown only for 13 trading days.$Amazon (AMZN.US)$, $Exxon Mobil (XOM.US)$

So how long can the market value throne of Nvidia last?

Barron's article believes that Nvidia's rapid increase in market value is a key reason why the company may be difficult to maintain the market cap throne. A cause for concern can be seen from the target price given by the analyst. Currently, Microsoft's stock price is far below the analyst's target price of $485.82, while Nvidia's stock price has exceeded the analyst's general expectation of $123.63, and Apple's stock price is also higher than the target price, but the gap between them is small.

Another concern is that Nvidia's rise is mainly based on a single technology - chips and platforms that provide power for artificial intelligence applications. Some people worry that if companies that buy Nvidia products cannot obtain enough revenue from investments, the artificial intelligence bubble may burst. In contrast, Apple and Microsoft have more extensive business that can drive long-term growth.

However, most analysts are still bullish on Nvidia. Susquehanna analyst Christopher Roland recently set Nvidia's target price at $160.

Roland said: "We value Nvidia at more than 28.5 times the median value, but we believe this is reasonable because Nvidia is in a very favorable position and the company will benefit from the booming terminal market. "

Hans Mosesmann of Rosenblatt Securities is currently the most bullish analyst. He raised Nvidia's target price from $140 to $200. Based on Monday's closing price of $130.98, this means Nvidia can grow by more than 50%.

Mosesman wrote in a report to clients: "We believe that Nvidia's Hopper, Blackwell, and Rubin series of products are driving the 'value' market share growth in one of Silicon Valley's most successful chip/platform product cycles."

Today, Nvidia's most famous product is the GPU that drives the artificial intelligence revolution, but the company's growing potential for software integration has inspired Mosesman.

Nvidia has many enticing opportunities in data switching and other fields, but Mosesman said: "The real story is software that can complement all hardware advantages. We expect that the proportion of software business in Nvidia's overall revenue will significantly increase in the next 10 years, and considering the sustainability of the business, the valuation tends to rise. "

Mosesman believes that Nvidia's EPS will exceed $5 by 2026. In contrast, the general expectation of analysts surveyed by FactSet is $4.16.

According to Scott Chronert, a strategist at Citi Research, Nvidia's rise has been the main driver of this year's increase. Chronert said, "The 14.6% return of the index from the beginning of the year can be divided into three parts, with Nvidia contributing 4.1%, other stocks in the 'Seven Giants' contributing 5.1%, and the remaining 493 component stocks contributing 5.4%." Chronert also pointed out that as far as profit growth is concerned, Nvidia is also "dominant, contributing only $4.20 of the $22.40 increase in earnings per share in the S&P 500 index." Overall, Nvidia's market cap increase has far-reaching implications, as the Technology Select Sector SPDR ETF (XLK) will have to sell more than $11 billion worth of Apple stock and buy nearly $10 billion worth of Nvidia stock to reflect the new weight of its tracked S&P Technology Select Sector index.$S&P 500 Index (.SPX.US)$"The 14.6% return of the index from the beginning of the year can be divided into three parts, with Nvidia contributing 4.1%, other stocks in the 'Seven Giants' contributing 5.1%, and the remaining 493 component stocks contributing 5.4%."

Chronert also pointed out that as far as profit growth is concerned, Nvidia is also "dominant, contributing only $4.20 of the $22.40 increase in earnings per share in the S&P 500 index."

Overall, Nvidia's market cap increase has far-reaching implications, as the Technology Select Sector SPDR ETF (XLK) will have to sell more than $11 billion worth of Apple stock and buy nearly $10 billion worth of Nvidia stock to reflect the new weight of its tracked S&P Technology Select Sector index.

Nvidia's recent 1-for-10 stock split has driven its rise, and its weight in the $70 billion Technology Select Sector SPDR ETF will increase. The ETF is scheduled to rebalance its holdings on June 21.

BlackRock's iShares confirmed that Microsoft will still have the biggest weight in the S&P Technology Select Sector index, but Nvidia will replace Apple in second place, meaning Nvidia's weight in the Technology Select Sector SPDR ETF could rise from the current 6% to over 20%.

As of Tuesday's close, Nvidia has risen 174% year-to-date, compared to Microsoft and Apple's 19% and 11% respective gains, and the S&P 500 and the S&P Technology Select Sector index have risen 15% and 19% respectively.$Nasdaq Composite Index (.IXIC.US)$As of Tuesday's close, Nvidia has risen 174% year-to-date, compared to Microsoft and Apple's 19% and 11% respective gains, and the S&P 500 and the S&P Technology Select Sector index have risen 15% and 19% respectively.

Edited by Jeffrey