A Setback for Nvidia: Microsoft Becomes the World’s Most Valuable Company; Huang’s Firm Falls Behind for the First Time in 16 Months
Microsoft has overtaken Nvidia to claim the title of the world’s most valuable company. This shift, which occurred on Tuesday, marks the first time since June 2025 that Nvidia has fallen behind another company. Microsoft’s market capitalization was recorded at $3.9 trillion. Recently, a “honey-trap” incident involving Nvidia CEO Jensen Huang came to light. Following reports of an affair between CEO Huang and a Chinese operative named Alice, a negative sentiment emerged around the chip-making giant, leading to a decline in its share price. Uncertainty regarding the future of artificial intelligence (AI) was also a contributing factor.
Why did Nvidia’s shares fall?
Nvidia CEO Jensen Huang is currently the subject of an investigation, which centers on whether he was targeted by a foreign intelligence operation. Microsoft shares closed at $543.25, down 0.4%, while Nvidia shares saw a decline of over 6%, settling at approximately $167.11. As of November 10, Huang’s net worth stood at $145.8 billion.
What is the investigation into Nvidia about?
Following the admission of an affair with a Chinese woman named Alice, Nvidia’s Board of Directors initiated an investigation into potential espionage by China. The Board stated that they found no evidence to suggest that national security or Nvidia’s proprietary secrets had been compromised. CEO Jensen Huang has supported the investigation and pledged his full cooperation. The Board has expressed its continued, full confidence in Huang and his leadership team. According to the board, a committee of independent directors is overseeing this investigation with the assistance of external independent counsel.
What do the earnings reports of both companies indicate?
According to media reports concerning the U.S. stock market, Microsoft recorded revenue of $92.3 billion for the quarter ending September 30, representing a 19% year-over-year increase. The company’s net profit rose by 32% to $36.6 billion. Cloud revenue grew by 30% to $63.9 billion, while Azure revenue increased by 48%. Meanwhile, Nvidia’s latest quarter ended on July 26, with revenue surging 106% to $96.2 billion. Its net profit climbed 126% to $59.7 billion, and data center revenue rose by 117% to reach $89 billion.
What are the future prospects?
According to a statement released by Microsoft, the company’s commercial remaining performance obligations increased by 73% to $677 billion. Earnings per share rose by 32% to $4.92, and the company generated $58 billion in cash from operations. Nvidia has announced that it is moving its Vera Rubin platform into full production; the platform is being utilized by partners such as Microsoft Azure, Google Cloud, and Oracle Cloud Infrastructure. For its third fiscal quarter, Nvidia has projected revenue of $108 billion, a figure that excludes data center compute revenue from China.
