Nvidia on Tuesday vaulted past Microsoft to become the most valuable publicly listed company in the world, highlighting its place at the forefront of Big Tech.

Nvidia's stock price rose nearly $5, or 3.7%, to $135.77, valuing the AI chip maker at $3.33 trillion, compared with $3.31 trillion for Microsoft and $3.29 trillion for Apple, which boasted the largest market capitalization until being surpassed by Microsoft earlier this year. A year ago, Nvidia's market capitalization had just crossed the $1 trillion threshold. 

The company's stock, which has shot up more than 174% this year, was trading at more than $1,200 earlier this month until Nvidia completed a 10-for-1 stock split on June 7 in order to make the shares more affordable. 

The ascent of Microsoft and Apple harken back to previous technologies, but Nvdia's startling rise in recent years has been powered by surging demand for its chips, which are helping to power massive corporate spending on all things AI, and its data center business. 

Nvidia, which as of 2020 had annual revenue of $11 billion, now takes in more than twice that amount in a single quarter, while its profits have soared. The company's leather-jacketed founder and CEO, Jensen Huang, is feted as a visionary for a new era of innovation driven by generative AI tools like ChatGPT.

Nvidia is also a leader in graphics processing hardware, cloud services and other technologies for high-performance computing, while expanding into other emerging sectors such as robotics and autonomous driving. 

The company's achievement helped drive the S&P 500 to a new record, as investors pile into companies like Nvidia that stand to benefit from the growth of AI.

"We were kind of waiting for this moment, actually, for quite some time," Angelo Zino of financial intelligence firm CFRA told AFP.

"The semiconductor industry is now the biggest sub-industry in the S&P 500," he added.

—The AFP contributed to this report.

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• Nvidia
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Alain Sherter is a senior managing editor with CBS News. He covers business, economics, money and workplace issues for CBS MoneyWatch.