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On Tuesday, Nvidia leapfrogged two of the tech industry’s most storied names to become the world’s most valuable public company, according to data from S&P Global. Its rise has been fueled by the boom in generative artificial intelligence and growing demand for the company’s chips – known as graphics processing units, or GPUs – that have made it possible to create artificial intelligence systems.

Nvidia’s rise is among the fastest in the history of the market. Just two years ago, the company’s market valuation exceeded $400 billion. Now, in the span of a year, it has gone from $1 trillion to more than $3 trillion.

Nvidia’s stock price rose 3.6% on Tuesday, bringing its value to $3.34 trillion. Both Microsoft and Apple fell, finishing the day behind the Silicon Valley chipmaker.

Nvidia’s rise is a testament to how artificial intelligence has revolutionized the world’s largest companies. The rise of this powerful technology elevated Microsoft to the largest market capitalization in January, dethroning Apple, before pushing Nvidia to take the crown. Last week, Apple also said it was getting into the artificial intelligence game and will add the technology to its products, including the iPhone, this fall.

Years before other major chip companies, Nvidia CEO Jensen Huang bet that GPUs would be essential to developing artificial intelligence and adapted his company to accommodate what he believed would be the next big tech boom.

His big gamble is paying off. By some measures, Nvidia controls more than 80% of the market for chips used in artificial intelligence systems. Nvidia’s biggest customers regularly place orders for chips to run computers in their giant data centers and are building their own AI chips so they aren’t so dependent on a single supplier.

“No one else has seen it or fully appreciated it,” said Daniel Newman, chief executive of the Futurum Group, a technology research firm. “They saw the trend, they built for the trend, and they enabled the market. They can actually charge whatever they want.

Nvidia’s rise has made Mr. Huang, 61, a celebrity in the technology world. After a computer conference in Taiwan earlier this month, he was surrounded by attendees wanting his autograph, including one woman who asked her to autograph his chest.

The company’s rise is reminiscent of dot-com titans like Cisco and Juniper Networks, which built the equipment that ran communications networks for the Internet. Cisco’s stock rose more than a thousandfold between its initial public offering in 1990 and 2000, when it briefly became the world’s most valuable company.

The speed at which Nvidia’s value has grown has been astonishing. Apple surpassed the $1 trillion milestone in August 2018 and became the first $3 trillion company last June. It also took Microsoft almost five years to go from $1 trillion to $3 trillion.

Nvidia investors are betting more on its potential than on current profits. Microsoft and Apple each generated more than $21 billion in profits during the three months ended in March. Nvidia generated profits of $14.88 billion in its latest quarter, which ended in April, but up more than 600% from a year earlier.

“The numbers have gotten so big and so fast that people are asking: Is this sustainable?” said Stacy Rasgon, an analyst at Bernstein Research. “If it turns out that the return of artificial intelligence is not there, then everything collapses.”

Only 12 companies have led the S&P 500 in market valuation since the index was created in 1926: AT&T, Apple, Cisco, DuPont, Exxon Mobil, General Electric, General Motors, IBM, Microsoft, Philip Morris, Walmart and now Nvidia , second to the S&P Dow Jones indices.

Nvidia’s rise has been fueled by its ability to consistently beat Wall Street expectations. Sales in the latest quarter tripled from the previous year, reaching $26 billion. It is also expected to double sales in the current quarter.

Nvidia sells everything from chips and the software needed to build AI systems with those chips to supercomputers. The machines, made of 35,000 parts and equipped with the company’s GPUs, sell for $250,000 or more. A new supercomputer Nvidia is bringing to market could sell for more than $1 million, Rasgon said.

“Although the cost of the system is increasing, the performance per dollar improves with each generation, which is how they are able to continue to acquire customers,” Rasgon said.

Wall Street awaits signs of a slowdown. Microsoft, Meta, Google and Amazon have all developed their own chips that can be used for artificial intelligence, and traditional chip rivals like Advanced Micro Devices and Intel have tried to get into Nvidia’s business with their own AI processors.

But Mr Huang believes it will take some time before anyone can catch up to Nvidia. The company has a ten-year head start and has cultivated a large community of AI programmers who prefer its technology.

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