Nvidia, the American semiconductor giant, has seen its market valuation soar past $3 trillion (£2.3 trillion), making it the second most valuable publicly listed company in the world, surpassing Apple, according to a BBC report.

Nvidia’s stock price experienced a more than 5 percent increase on Wednesday, reaching over $1,224 per share. This significant rise continues the company’s rapid ascent that began last year, driven by investor confidence in Nvidia’s strategic positioning to capitalize on the AI investment wave.

The firm’s market valuation now trails only Microsoft, another tech behemoth heavily invested in AI through its partnership with OpenAI, the creators of ChatGPT.

As recently as February, Nvidia was valued at $2 trillion. However, the company’s announcement of a stock split, scheduled for Friday, has fueled another surge in share purchases.

The stock split will increase the number of shares by a factor of 10 while proportionally reducing their individual value, making them more accessible to smaller investors. This move is expected to further boost demand for Nvidia’s stock.

Founded in 1993, Nvidia initially produced graphics processing units (GPUs) tailored for computer gaming. However, long before the current AI boom, Nvidia began incorporating features into its chips designed to enhance machine learning capabilities.

Nvidia is now viewed as a bellwether for rapidly adopting AI-powered technologies across various sectors. CEO Jensen Huang has heralded this era as the dawn of the “next industrial revolution.”

This optimism is reflected in Nvidia’s financial performance, with the company reporting $26 billion in sales for the three months ending April 28, 2024, more than tripling its revenue from the same period in 2023 and marking an 18 percent increase from the preceding quarter.

The surge in Nvidia’s stock price is part of a larger trend of market optimism surrounding AI, which has also driven the S&P 500 and Nasdaq indices to record highs. While Apple had faced challenges earlier in the year due to stagnating sales growth, its shares have recently rebounded.

Apple’s share price increased modestly by 0.7 percent, bringing its market capitalization to approximately $3 trillion. Market capitalization is typically calculated by multiplying a company’s share price by its total number of outstanding shares.