NVIDIA Is Now More Valuable Than Meta For The First Time Ever

NVIDIA CEO Jensen Huange Omniverse representation
Even during a shortage, selling GPUs is a lucrative business. Or the case might be, especially during a shortage—NVIDIA reported a record $7.1 billion in revenue last quarter, and all indications is that its posed to post another monster earnings report next week. This has caught the intention of investors, and as NVIDIA's share price continues to climb, it just overtook Facebook's parent company Meta to become the 7th most valuable company in the US.

Of course, there's some room for interpretation there. We're talking about market capitalization, which is the total value of a company's shares of stock. So for those who want to quibble the point, it would be more accurate to say NVIDIA now holds the 7th highest market cap of any company in the US, having leapfrogged Meta (Facebook) for the first time to get there. But there is at least a correlation between market and a company's perceived valued at any given moment.

NVIDIA Stock Graph
Source: Google Finance

The numbers change by the hour and even by the minute. But as of this writing, NVIDIA shares are trading at around $265, giving the company a market cap of $663 billion. Meta, meanwhile, is trading at around $229 for a market cap of $622.3 billion. Looking back a full year of activity, Meta peaked at around $382 last September, and was at $323 last week before plummeting as much as 30 percent.

It probably didn't help that Meta last week claimed it would take a $10 billion revenue hit from Apple's iOS App Tracking Transparency feature, which went into effect in April of last year. That feature prevents developers from "[tracking] them or [accessing] their device's advertising identifier" without the user's permission. Meta, through Facebook, is also seeing younger users migrate to TikTok.

NVIDIA does not face the same set of challenges, obviously. The company is selling every GPU it can source from its manufacturing partner, TSMC, and is seeing tremendous growth in both its gaming and data center channels, the latter of which contributed over $2.9 billion in revenue last quarter.

"Demand for NVIDIA AI is surging, driven by hyperscale and cloud scale-out, and broadening adoption by more than 25,000 companies. NVIDIA RTX has reinvented computer graphics with ray tracing and AI, and is the ideal upgrade for the large, growing market of gamers and creators, as well as designers and professionals building home workstations," NVIDIA CEO Jensen Huang said at the time.

What makes this change of position especially interesting is it comes on the heels of NVIDIA officially calling of its $40 billion Arm deal. NVIDIA had attempted to acquire Arm from Softbank in what would have been the biggest chip deal to date, but regulatory challenges proved too much to overcome.

Calling off the deal came with a $1.25 billion hit, the sum of NVIDIA's prepayment to Softbank that, per the terms of the agreement, it gets to keep as a breakup fee. NVIDIA's stock dipped slightly following the news, but quickly recovered and them some—it's up over 5 percent today.

In case you're wondering, the US firms now ahead of NVIDIA include Apple ($2.87 trillion), Microsoft ($2.32 trillion), Amazon ($1.65 trillion), Alphabet/Google ($1.86 trillion), Tesla ($965.39 billion), and Berkshire Hathaway ($721.b billion).