Nvidia is now the largest U.S. company - and five years ago it wasn't even in the top 20

By Emily Bary

Nvidia becomes only the sixth company since 2001 to finish a session with the largest market cap in the U.S.

Nvidia's blistering rise through the ranks of the largest U.S. companies culminated Tuesday with the chip maker taking over the title of most valuable.

With Nvidia shares (NVDA) rising 3.5% in Tuesday trading, the company passed Microsoft Corp. (MSFT) at the close to become the largest U.S. company by market value. Nvidia's market cap was $3.34 trillion, while Microsoft's was $3.32 trillion and Apple Inc.'s (AAPL) was next, at $3.29 trillion.

Tuesday marked the first time that Nvidia was the largest on an intraday basis, and the trend carried through to the close to make official Nvidia's status as the new market-cap leader.

Nvidia's rise is especially notable because the company wasn't even in the top 20 five years ago, according to Dow Jones Market Data. It ranked fifth by market cap a year ago, and 10th two years back.

Read: Nvidia's stock packs 50% more upside, says Wall Street's new biggest bull

Dating back to 2001, only five other companies have gotten to call themselves most valuable in the U.S., according to Dow Jones Market Data. Those are Microsoft, Apple, Amazon.com Inc. (AMZN), Exxon Mobil Corp. (XOM) and the former General Electric (GE). Apple occupied the spot the longest during that span, while Amazon held down the position for only 13 sessions in 2019.

There's been a bit of shuffling among the top three in the past week, with Apple having overtaken Microsoft at Thursday's close.

Nvidia shares have been on an eye-popping run over the past year or so as the company has proven itself the major financial beneficiary of the artificial-intelligence rush. Nvidia's stock is up 174% so far this year, and it's ahead 217% over the past 12 months.

Microsoft's stock has gained 19% this year and Apple's had advanced 11%.

Nvidia's stock has been a major driver of the S&P 500 index's SPX performance so far this year, with Citi strategists saying late Monday that when looking at the 14.6% year-to-date climb in the index as of that point, Nvidia was responsible for 5.1 percentage points, almost as much as the contribution from the 493 index components that aren't among the large technology companies known as the Magnificent Seven.

And in general, Nvidia's market-cap rise has far-ranging implications, as it will force the Technology Select Sector SPDR ETF XLK to sell Apple shares and buy up almost $10 billion worth of Nvidia's stock to reflect the new weightings of the S&P Technology Select Sector Index that it tracks.

See more: Popular tech ETF forced to dump Apple stock, buy Nvidia in upcoming rebalancing

-Emily Bary

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06-18-24 1621ET

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