Microsoft Is Back Above $4 Trillion and Only $266 Billion Behind Nvidia
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Microsoft (NASDAQ:MSFT | MSFT Price Prediction) rose 2.75% on Monday and closed at $545.18. That lifted its market value back to $4.048 trillion. NVIDIA (NASDAQ:NVDA) fell 4.27% to $178.67, leaving it worth $4.314 trillion.
NVIDIA now leads by about $266 billion, or roughly 6% of Microsoft’s value. On October 6, its lead was about $1.84 trillion. Both companies just reported strong AI quarters. The gap has narrowed because they make money from AI in different ways, and because only one of them now faces a question about its leadership.
A Board Probe Drags on NVIDIA While Microsoft Climbs
NVIDIA’s board opened an independent investigation into national security concerns that news reports raised about CEO Jensen Huang. Huang disclosed the probe in a November 8 letter to employees and said he will cooperate fully. U.S. authorities reportedly determined that Huang had an affair with an alleged Chinese spy (reported allegation). The board says it has no reason to believe national security or company secrets were compromised.
NVIDIA closed at its lowest level since April 7 on a day when the S&P 500 rose 2.35%. No single reason explains Microsoft’s gain. My read is that investors who wanted big-tech exposure without a company-specific problem found it in Microsoft.
Microsoft Sells the AI Capacity That NVIDIA’s Chips Power
| Business Driver | Microsoft | NVIDIA |
|---|---|---|
| Revenue Growth | 18.8% | 105.8% |
| AI Engine | Azure, up 48% | Data Center, up 117% |
| Forward Signal | $677 billion commercial backlog | $108.0 billion third-quarter revenue guidance |
Microsoft sells cloud capacity and software to businesses. CFO Amy Hood said, “We still have demand that exceeds supply.” That shortage explains why capital spending reached $45.2 billion last quarter and why Microsoft expects it to top $50 billion this quarter.
NVIDIA sells the chips inside those data centers, including the Vera Rubin GPUs that Microsoft has already installed. Because memory prices are so high, NVIDIA’s management expects gross margin to bottom at 71% to 72% in the fourth quarter.
Microsoft’s Windows OEM and Devices revenue fell 22%, and management expects a mid-30s decline this quarter. That unit is small next to the commercial backlog, though. NVIDIA’s supply commitments reached $279 billion, and the probe raises a leadership question that its operations have not.
NVIDIA’s November 17 Earnings Report Will Test the Gap
October CPI comes out Tuesday at 8:30 a.m. ET. NVIDIA’s earnings are expected after the close on November 17, although the company has not confirmed the date. Microsoft could pass NVIDIA if the probe drags on, but that is speculation. Strong Vera Rubin numbers would likely widen the gap again.
Why Microsoft Holds the Stronger Position Right Now
I think Microsoft has the stronger position right now. The stock is up about 12.7% in 2026, while NVIDIA is down 3.97%. The 58 analysts who cover Microsoft have an average price target of $636.12.
Microsoft trades at 30 times earnings, compared with 36 for NVIDIA. Its AI revenue also comes from a wide range of enterprise customers, and those businesses are now building agents into their everyday work.
My main concern is the plan to spend about $170 billion on capital projects this calendar year. If Azure falls short of management’s 49% to 50% constant-currency growth forecast, that spending gets harder to justify. In that case, NVIDIA’s position would likely improve once its board finishes the review.
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Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
