New York: Microsoft overtook Nvidia to become the world’s second-most valuable publicly listed company on Tuesday, November 10, after shares of the artificial intelligence (AI) chipmaker fell more than 6 per cent amid concerns over its business outlook and an investigation involving Chief Executive Officer Jensen Huang.
Nvidia shares dropped to around $167.11 during trading, while Microsoft shares declined by a comparatively smaller 0.4 per cent to $543.25. The contrasting movements allowed Microsoft to move ahead of Nvidia in market capitalisation.
Nvidia faces pressure amid AI market uncertainty
Nvidia has been one of the biggest beneficiaries of the global AI boom, supplying advanced processors used to develop and operate artificial intelligence systems. However, investor concerns have increased over whether the enormous spending on AI infrastructure will generate sufficient returns.
Questions surrounding the pace of AI investment and future demand for high-performance chips have added pressure to the company’s stock.
The latest decline came after Nvidia shares had already fallen 4.3 per cent in the previous trading session. Reuters reported that the stock was on track to lose more than $470 billion in market value over two sessions as concerns surrounding the company intensified.
Investigation involving CEO Jensen Huang adds to concerns
The market decline also coincided with increased scrutiny of Nvidia CEO Jensen Huang. The company’s board has reportedly launched an internal investigation into matters surrounding Huang’s relationship with a businesswoman allegedly linked to Chinese intelligence activities.
The Federal Bureau of Investigation (FBI) is also examining whether Huang was targeted by a foreign intelligence operation. The investigation has raised questions about corporate governance, possible security concerns and the company’s leadership.
Reports have alleged that the businesswoman’s connections helped facilitate shipments of Nvidia chips to Chinese companies. These claims have not been independently verified, and the investigations have not established that Huang knowingly participated in any wrongdoing.
Nvidia’s board has said it has no reason to believe that national security or company secrets were compromised. Huang has not indicated that he intends to step down as CEO.
Microsoft moves ahead despite a slight share decline
Microsoft’s shares also ended lower during Tuesday’s trading session, falling 0.4 per cent to $543.25. However, the smaller decline compared with Nvidia allowed the software giant to regain the second position in the global market capitalisation rankings.
The change highlights how movements in the share prices of major technology companies can quickly alter their positions in the global market.
Microsoft has significant operations across cloud computing, enterprise software and artificial intelligence. Its Azure cloud platform and investments in AI have made it a major participant in the expanding technology sector.
Nvidia’s position in the AI industry remains under scrutiny
Nvidia’s market performance is closely watched because of its central role in supplying processors for AI development. Its graphics processing units (GPUs) are widely used in data centres, large language models and advanced computing systems.
The company is also facing questions about its exposure to restrictions on advanced chip exports to China. Any developments involving export controls, regulatory scrutiny or changes in global demand could influence investor sentiment.
The latest market movement does not by itself indicate a change in Nvidia’s underlying business position. However, the combination of AI spending uncertainty and investigations involving its chief executive has increased attention on the company.
Microsoft’s rise above Nvidia in market value marks a notable shift among the world’s largest technology companies. Investors will continue to monitor developments surrounding Huang, the investigations and demand for AI infrastructure as they assess the outlook for both companies.