It’s not every day that a startup soars to stratospheric heights to become the world’s most valuable company and a leading player in the competitive AI chip industry. That’s Nvidia for you.
But it doesn’t stop there: Nvidia’s success story is still developing, as it single-handedly eclipses all European stock markets in terms of market capitalization.
Since earlier this week, Nvidia has become the most valuable company in the world, thanks to an aggressive share price increase that has captured all of Wall Street.
With a market capitalization of $3.2 trillion, Deutsche Bank noted in a note on Thursday that Nvidia is now greater than the value of all listed stocks in Europe’s major business centers – Germany, France and Britain. its market capitalization was $3.35 trillion.
It didn’t always look like this. Ten years ago, the London Stock Exchange (LSE) had a significant lead, with listed shares collectively worth 400 times Nvidia’s value. But this past week, Nvidia left LSE in the dust.
At the sky-high valuation, the only markets whose listed shares are collectively larger than Nvidia are the US, India, China and Japan, Deutsche Bank said.
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The California-based company’s growth has been accelerating for some time. It’s also rare for companies to see such rapid growth, even in the technology universe. Apple was the first company with a trillion dollars back in 2018, eventually reaching the $3 trillion mark last year. The AI frenzy helped Microsoft beat Apple to become the most valuable company in January, before Nvidia took the crown from the Redmond, Washington-based company.
Nvidia’s GPUs, or graphics processing units, have kept up with the recent surge in demand for AI. Meanwhile, the speed and performance of its chips and the package of technical solutions that Nvidia offers have also improved. Investors have paid attention to the company’s strengths and have doubled the value of the stock since January, resulting in a 10-to-1 stock split earlier in June.
London has a game
It’s hard to compare a company with such massive growth to virtually anything else in the world, let alone the LSE. Nvidia’s growth trajectory, which is still accelerating, is startling considering the US still faces relatively high interest rates.
Yet LSE has scored big wins recently. It narrowly beat Paris to become Europe’s biggest stock exchange amid political turmoil in France, while also welcoming the strong IPO of computer maker Raspberry Pi.
These achievements pale in comparison to London’s relative weakness in attracting top company listings and increasing their value. Even today, the dominant players in the stock market belong to traditional sectors such as energy, mining and finance, with only a handful of technology players.
What LSE is seeing now is not a product of its lack of ambition, argued head of exchange Julia Hoggett. It is undoubtedly still a crucial financial center that just needs to be renewed.
“The UK is not investing in itself as much as it could or should,” Hoggett said in an op-ed The Times of London Thursday, adding that markets were undergoing “the biggest overhaul in decades.”
The overhaul, which could start as early as this year, will include changes to listing rules and greater participation by Britons in equity investments through their pension schemes.
The LSE chief previously said the UK stock market was ‘punching above its weight’.
“If you take them out and look at the actual companies of similar size in the US to the kind of companies we have in Britain, they haven’t really performed any better,” she told the paper. BBC last month.
The Nvidia example shows how a big growth story in the US can still give London value for money. What London – and other European financial centers – do to stay in the game remains a question.
