Nvidia Just Passed Microsoft to Become the World's Most Valuable Stock. Here's What History Says Happens Next.
What historical trend do stocks show after becoming the most valuable?
Stocks tend to continue rising and outperform the S&P 500 for several years after becoming the most valuable. This pattern has held for companies like Microsoft, ExxonMobil, and Apple. The underlying reason is that companies don't become the world's most valuable without strong business trends supporting them, and these trends often persist for years.
Which companies have previously been the most valuable on a U.S. exchange?
In the past 30 years, four companies have been the most valuable on a U.S. exchange: General Electric (now GE Aerospace), Microsoft, ExxonMobil, and Apple. Each of these companies enjoyed a prolonged period at the top, and their stock prices experienced significant growth even after reaching the top.
How much has Nvidia's stock increased in the past year?
Nvidia's stock has soared by 258% over the past 12 months, driven by increased demand for its semiconductors, which are used to power artificial intelligence applications2. The company's data center revenue reached $47.5 billion during its fiscal 2024 year, a 217% increase from fiscal 2023.