Microsoft (NASDAQ:MSFT) briefly overtook Nvidia (NASDAQ:NVDA) on Tuesday to become the world’s second-most valuable company for the first time since June 2025, as fallout from CEO Jensen Huang’s admitted affair deepened the chipmaker’s selloff.
Nvidia held a staggering $1.84 trillion market-value lead over Microsoft on Oct. 6. Five weeks later, that advantage vanished as Nvidia shares plunged more than 6% Tuesday.
Microsoft didn’t even need a rally. Its shares fell 2.7% Tuesday, but Nvidia’s steeper decline pushed Microsoft ahead.
Microsoft’s AI Business Keeps Growing
Microsoft’s success isn’t simply a matter of Nvidia losing ground, the software giant reported quarterly revenue of $92.3 billion, up 19%. Azure, its cloud computing business, grew 48%, while its backlog of contracted commercial revenue reached $677 billion.
Demand is so strong that Microsoft is struggling to keep up.
“We still have demand that exceeds supply,” Chief Financial Officer Amy Hood told investors.
Microsoft spent $45.2 billion on infrastructure last quarter to expand its computing capacity. Much of that spending benefits Nvidia, whose chips power Microsoft’s AI services.
But Microsoft is also developing its own Maia chips, which already handle some Copilot workloads. It plans to deploy them on a much larger scale starting in 2027, reducing its reliance on Nvidia for certain AI tasks.
Nvidia’s Jensen Huang Problem
The fallout from Huang’s affair has added to Nvidia’s troubles, with Reuters reporting the chipmaker was heading for a roughly $470 billion market-value loss over Monday and Tuesday.
The woman involved is reportedly suspected of Chinese intelligence ties, and Nvidia’s board has opened an investigation.
The controversy has also exposed a deeper concern: Nvidia’s dependence on its longtime CEO.
Bloomberg reports Huang has roughly 60 direct reports but no publicly identified successor after 33 years running the company.
“Companies like Microsoft and Apple always seem to have a CEO in waiting, but Nvidia has seemed to lean on its founder,” Synovus Trust fund manager Daniel Morgan told Bloomberg.
What Prediction Markets Expect
Apple (NASDAQ:AAPL) remains the world’s most valuable company.
On Polymarket, traders give Apple roughly 71% odds of finishing 2026 on top, compared with 27% for Nvidia and about 1% for Microsoft.
Microsoft may have overtaken Nvidia for second place, but traders barely consider it a contender for first.
Nvidia had reclaimed second place by early afternoon Tuesday. With the chipmaker forecasting $108 billion in revenue when it reports earnings Nov. 17, the battle for second place remains unsettled.
Image: Shutterstock
Read Also:
Could Jensen Huang's Affair Be the Most Expensive in Human History?