Nvidia’s market value has surged past $3tn (£2.3tn), lifting the chipmaker ahead of Apple to become the second most valuable publicly listed company in the world.

The firm’s share price rose more than 5% on Wednesday, to more than $1,224.

It extended a breathtakingly rapid climb that started last year, powered by bets that the firm is positioned to be a major winner from a wave of investment in artificial intelligence (AI).

Its market value now sits just behind Microsoft, another key player in the industry thanks to its investments in Chat GPT-maker OpenAI.

Valued at “just” $2tn as recently as February, Nvidia sparked a new wave of share purchases after it announced plans last month for a so-called stock split.

The move will increase the number of shares by a factor of 10 and reduce their value accordingly, a change aimed at making shares more affordable to small-time investors.

Set to happen on Friday, it is expected to generate even more demand for the stock.

Founded in 1993, Nvidia was originally known for making the type of computer chips that process graphics, particularly for computer games.

Long before the AI revolution, it started adding features to its chips that it says help machine learning – all of which has helped it increase its market share.

It is now seen as a key company to watch to see how fast AI-powered tech is spreading across the business world, a shift boss Jensen Huang has declared the dawn of the “next industrial revolution”.

His company has seen explosive growth, reporting sales of $26bn in the three months to 28 April – more than triple the same period in 2023, and up 18% from the previous three month.

Optimism about AI is one of the forces behind a broader market rally over the last year, which pushed the S&P 500 and the Nasdaq in the United States to new records on Wednesday.

Apple had appeared to be losing out earlier this year as sales growth stalled.

But in recent weeks, its shares have been buoyed by anticipation over how it plans to incorporate AI into its own strategy.

Shares in the firm rose 0.7%, giving it a market capitalisation of roughly $3tn, which is generally calculated by multiplying the number of shares in a company by its current share price.