It’s not every day that a startup explodes into the world’s most valuable company and a leader in the highly competitive AI chip industry. That’s Nvidia.
But it doesn’t end there: NVIDIA’s success story continues to grow, with its market capitalization surpassing that of all European stock markets alone.
As of earlier this week, NVIDIA was the most valuable company in the world, thanks to a stock price surge that rocked all of Wall Street.
Deutsche Bank noted in a report Thursday that NVIDIA’s current market capitalization of $3.2 trillion is greater than the combined value of publicly listed stocks in major European business hubs such as Germany, France and the U.K. At the time the report was released, NVIDIA’s market capitalization was $3.35 trillion.
It wasn’t always this way: Ten years ago, the London Stock Exchange (LSE) held a huge lead over Nvidia, with the total value of its shares traded on the exchange 400 times its market capitalization. But last week, Nvidia blew the LSE away.
Deutsche Bank said that while the company’s valuation is sky-high, the only markets where its listed shares combined are larger than Nvidia’s are the United States, India, China and Japan.
Yi-Hwa Chen—AFP/Getty Images
The California-based company’s growth has been accelerating for a while now, and it’s rare for a company to grow so fast in the tech world. Apple became a $1 trillion company in 2018, and finally hit the $3 trillion mark last year. Thanks to the AI boom, Microsoft overtook Apple as the most valuable company in January, but Nvidia has since unseated the Redmond, Wash.-based company.
Nvidia’s GPUs (graphics processing units) have kept pace with the recent surge in AI demand, while the speed and performance of the company’s chips and the suite of technology solutions it offers have also advanced. Investors have taken notice of the company’s strength, and its shares have doubled since January, when it underwent a 10-for-1 stock split in early June.
There’s a game in London
It’s hard to compare a company that has grown this fast to any other company in the world, let alone the London Stock Exchange, and Nvidia’s still-accelerating growth trajectory is impressive, especially considering the relatively high interest rate environment the U.S. remains in.
Still, the LSE has had some big wins recently: It just overtook Paris to become Europe’s largest stock exchange amid political turmoil in France, and it also welcomed a successful initial public offering for computer maker Raspberry Pi.
These achievements pale in comparison to London’s relative weakness in attracting and increasing the value of large companies to IPOs: Even today, the London stock market is dominated by traditional industries such as energy, mining and finance, with only a handful of tech companies.
Julia Hoggett, chief executive of the London Stock Exchange, argued that the situation the exchange currently finds itself in is not a result of the exchange’s lack of ambition: there’s no doubt that the London Stock Exchange remains an important financial hub, it just needs reform.
“The UK is not investing in itself as much as it could or should,” Hoggett wrote in the editorial. London Times He added Thursday that markets are undergoing “the biggest restructuring in decades.”
The reforms, which could come into force as early as this year, include changes to listing rules and allowing British people greater participation in stock market investment through pension schemes.
The CEO of the London Stock Exchange previously commented that the UK stock market is “punching its teeth”.
“If you remove those and actually look at US companies of a similar size to those in the UK, they’re actually not doing any better than the UK,” she said. BBC last month.
Nvidia’s example highlights that the big U.S. growth story could yet rival London’s. The question remains what London, and other European financial hubs, will do to stay ahead of the competition.
