Nvidia, which has seen its stock surge more than ninefold since the end of 2022, has now eclipsed Microsoft to become the world’s most valuable publicly traded company. Achieving a market cap exceeding $3 trillion in early June, Nvidia joins the exclusive club alongside Microsoft and Apple. The company has notably benefited from the booming demand for generative artificial intelligence.

Initially recognized in niche gaming circles for its graphics chips, Nvidia has transformed into the foremost public company globally. On Tuesday, its shares rose 3.6%, pushing its market cap to $3.34 trillion, surpassing Microsoft at $3.32 trillion. Earlier in the month, Nvidia reached the $3 trillion milestone, surpassing Apple in the process.

Nvidia’s stock has surged more than 170% year-to-date, bolstered by robust first-quarter earnings reported in May. This extraordinary rise aligns with the ascent of generative artificial intelligence technologies.

In contrast, Apple’s shares declined by 1.1% on Tuesday, leaving the iPhone maker with a market value of $3.29 trillion.

Nvidia commands approximately 80% of the market for AI chips used in data centers, a sector that has expanded dramatically as major tech firms like OpenAI, Microsoft, Alphabet, Amazon, Meta, and others scramble to acquire the necessary processors for AI model development and extensive computational tasks.

In its latest quarter, Nvidia’s data center revenue surged by 427% year-over-year to $22.6 billion, representing about 86% of the company’s total sales.

Founded in 1991, Nvidia initially focused on selling chips for gamers to power 3D titles. It also ventured into cryptocurrency mining chips and cloud gaming subscriptions. However, over the past two years, Nvidia’s stock has soared as Wall Street recognized its technology as pivotal in driving the AI explosion, which shows no signs of abating. This surge has propelled co-founder and CEO Jensen Huang’s net worth to approximately $117 billion, ranking him as the 11th wealthiest person globally, according to Forbes.

Meanwhile, Microsoft’s shares have risen about 20% this year. The tech giant has also benefited significantly from the AI boom, particularly after acquiring a substantial stake in OpenAI and integrating its AI models into key products such as Office and Windows. Microsoft, a major purchaser of Nvidia’s GPUs for its Azure cloud service, recently unveiled a new line of laptops optimized to run its AI models, branded as Copilot+.

Nvidia’s rapid rise has positioned it as a newcomer among the most valuable U.S. companies, a title traditionally contested between Apple and Microsoft in recent years. Despite its rapid growth, Nvidia has yet to be included in the Dow Jones Industrial Average, which comprises 30 of the largest U.S. companies by stock price. Alongside its recent earnings report, Nvidia announced a 10-for-1 stock split effective June 7, aimed at enhancing its chances of Dow inclusion. The Dow is a price-weighted index where companies with higher stock prices exert greater influence on the benchmark.