Nvidia (NVDA) overtook Microsoft (MSFT) on Tuesday as the most valuable company in the world just two weeks after it took the No. 2 spot from Apple (AAPL).

Nvidia's stock price rose about 3.5%, eclipsing $135 per share and giving the chipmaker a market capitalization over $3.33 trillion. With a 0.4% slide on Tuesday, Microsoft's market cap stood at nearly $3.32 trillion.

Shares of Nvidia are up more than 215% over the last 12 months and more than 3,400% over the last five years. Year to date, Nvidia has gained 175%; Microsoft stock is up just less than 19% in 2024.

Nvidia first crossed a $1 trillion market cap on June 13, 2023. The stock advanced north of $2 trillion on March 1, and then rapidly crossed the $3 trillion mark for the first time on June 5. The company's advance from a $1 trillion to a $3 trillion market cap was the fastest on record.

Nvidia's surge has made it a top weighting in the S&P 500 (^GSPC), and the chipmaker has served a pivotal role in the benchmark index hitting record highs in 2024.

Up until May, the S&P 500 had traded with a near-perfect correlation to Nvidia's price movement, meaning that as Nvidia's stock rose, so did the broader index. As of Monday, Nvidia's stock gains alone had contributed about one-third of the S&P 500's year-to-date rise, according to data from Citi's equity research team.

Nvidia completed a 10-for-1 split on June 10.

The company's rise comes amid the generative AI explosion that kicked off when OpenAI debuted its ChatGPT platform in late 2022. Nvidia's chips, modified graphics cards, and CUDA software platform are designed to both train and run AI programs, giving it a strategic advantage that experts say will take rivals AMD (AMD) and Intel (INTC) years to overcome.

Nvidia is the tech industry's go-to supplier for AI chips and integrated software.

Tech behemoths, including Amazon (AMZN), Google (GOOG), Meta (META), Microsoft, Tesla (TSLA), and others, use its hardware to power everything from their cloud-based AI offerings for customers to their own AI models and services.

During a keynote at the Computex conference in Taiwan on June 2, CEO Jensen Huang announced that the company will release a high-powered version of its Blackwell chip — called the Blackwell Ultra — in 2025, followed by a new AI chip platform, Rubin, in 2026. The company will debut an Ultra version of Rubin in 2027.

In the first quarter, Nvidia reported adjusted earnings per share of $6.12 on revenue of $26 billion, jumps of 461% and 262%, respectively, from the same period a year ago.

Nvidia's data center revenue in the most recent quarter increased 427% year over year to $22.6 billion, accounting for 86% of the company's total revenue for the quarter. Nvidia's gaming segment, which was previously its most important business, saw revenue of $2.6 billion.

But AMD and Intel are pushing forward with their own AI chips with the goal of outmaneuvering Nvidia. AMD recently announced its MI325X and MI350 will hit the market in 2024 and 2025, respectively, and said its next-generation MI400 AI accelerator platform will land in 2026.

Intel, meanwhile, said its Gaudi 2 and Gaudi 3 AI accelerators will undercut competing chips on price. And with companies spending billions on AI chips, any price savings will certainly be welcome.

Nvidia is also contending with growing competition from its own customers, as Amazon, Google, and Microsoft seek to wean themselves off of their dependence on the company's chips and save on capital expenditures while they're at it.

Email Daniel Howley at [email protected]. Follow him on Twitter at @DanielHowley.

Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.

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