Nvidia Just Became the World's Most Valuable Company. Here's What May Happen Next.

Nvidia (NASDAQ: NVDA) might be the company everyone's talking about thanks to its dominance in the high-growth area of artificial intelligence (AI), but it remained behind one other tech player, Microsoft, in terms of market value. Until this week. On June 3, Nvidia roared past the software giant to become the world's most valuable company with a market value of $3.444 trillion. Microsoft's market value totaled $3.441 trillion at the close of trading.

This happened a week after Nvidia's fiscal 2026 first-quarter earnings report, one that maintained the company's track record of surpassing analysts' estimates and delivering double-digit revenue growth. And even though investors questioned the strength of AI demand and spending in recent months, Nvidia's words -- and comments from its biggest customers -- showed business still is booming.

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All of this is great news, but can this AI chip powerhouse maintain this position in the market cap top spot?

Image source: Getty Images.

Nvidia vs. Microsoft and Apple

It's important to note that this isn't the first time Nvidia has claimed the title of the world's most valuable company. In fact, just a few months ago, in January, Nvidia's market value surpassed those of Microsoft and smartphone giant Apple.

NVDA Market Cap data by YCharts

But concerns about technology spending weighed heavily on Nvidia shares in recent months, and that pushed market value lower once again.

Now, though, two elements clearly are driving this rebound in the AI giant. First, market sentiment and stock performance have improved in recent weeks on optimism that President Donald Trump's import tariffs won't result in extreme headwinds for corporate earnings. The U.S. struck an initial trade deal with China at lower-than-expected tariff levels and is working on a permanent arrangement. Lower tariffs suggest less strain on companies' budgets and on the consumer's wallet.

Second, as mentioned, Nvidia reported strong demand for its latest release, the Blackwell architecture and chip, and noted that customers are rushing to the company for inferencing power. Nvidia's chips -- graphics processing units (GPUs) -- fuel this process that allows large language models to think through problems and generate answers.

All of this helped Nvidia report a 69% increase in revenue to $44 billion in the quarter and deliver strong profitability on sales. Even including a charge Nvidia took for canceled sales to China following U.S. export controls, Nvidia's gross margin came in at more than 60%. And excluding the impact of the charge, Nvidia met its forecast of gross margin in the low-70% range.

A trillion-dollar AI market

On top of this, forecasts showing the AI market will increase from hundreds of billions of dollars today to trillions of dollars by early next decade suggest there's room for Nvidia and other AI leaders to grow.

So, will Nvidia keep its title as the world's biggest company? One potential risk to Nvidia's share price performance -- and market value gains -- is the situation concerning the export of AI chips to China. Today, U.S. restrictions prevent Nvidia from selling its H20 chip -- one that it designed specifically for the Chinese market -- to that country. If Nvidia remains completely blocked from the Chinese market, revenue growth and stock performance could suffer, at least in the short term.

But any progress in that area, even small, could act as a catalyst for share gains.

Considering all of these elements, the positive and the negative, I think Nvidia may once again remain neck and neck with Microsoft and Apple when it comes to market cap in the months and quarters to come. We might see each of these companies periodically take the top spot.

If tariff issues and the China export situation are completely resolved, though, Nvidia could have the advantage. Nvidia's leadership and innovation in the high-growth AI market as well as its double-digit revenue increases quarter after quarter could eventually push it ahead, making it the world's biggest company for the long term.

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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.