Nvidia has overtaken Microsoft and Apple to become the world’s most valuable company for the first time.

Shares in the US tech company, which makes artificial intelligence (AI) chips, rose by 3.5pc in New York to value Nvidia at $3.34 trillion (£2.63 trillion).

Microsoft, which had been in the lead, was close behind with a market capitalisation of $3.32 trillion, while Apple was worth $3.29 trillion.

Shares in Nvidia have risen by 180pc so far this year and nearly 4,500pc over the past five years, amid a wave of excitement about the possibilities of AI technology.

Nvidia is seen as the front-runner in the development of the high-powered chips that are central to the development of AI.

Despite the huge gains, some analysts believe Nvidia will become far more valuable in future.

Rosenblatt Securities analyst Hans Mosesmann said its share price could rise from its current level of $136 to around $200. That would value the company at nearly $5 trillion.

Daniel Ives, an analyst at Wedbush Securities, said: “We believe over the next year the race to $4 trillion market cap in tech will be front and centre between Nvidia, Apple, and Microsoft.”

He added that Nvidia’s chips should be seen as “the new gold or oil” as companies adopt AI.

Nvidia, Microsoft and Apple have been vying for the title of world’s most valuable company for weeks. Last Wednesday,

Apple briefly overtook Microsoft to claim the title after unveiling updates to its iPhone software that will be powered by artificial intelligence (AI).

Microsoft, meanwhile, has been propelled higher after investing in ChatGPI-maker OpenAI and incorporating AI features into Windows.

Nvidia executives have cashed in on the company’s huge stock rally. Bloomberg reported that they have sold about 770,000 shares this year totalling more than $700m. Last week, Jensen Huang, Nvidia’s chief executive, sold $31m worth of stock, according to a regulator filing.

Nvidia declined to comment on the share sales.

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