Nvidia Corporation has surged past Apple Inc. to become the world’s second-most valuable company, marking a significant shift in the technology industry’s hierarchy. On Wednesday, Nvidia’s stock rallied to record highs, pushing its market valuation beyond the $3 trillion mark.
The Santa Clara-based company’s shares closed at $1,224.40, a 5.2% increase, valuing Nvidia at $3.012 trillion. Apple, a long-standing titan in Silicon Valley since the launch of the iPhone in 2007, saw its market capitalization at $3.003 trillion after a modest 0.8% rise in its stock.
Nvidia’s ascent is fueled by unprecedented demand for its cutting-edge artificial intelligence (AI) chips. As global tech giants like Microsoft, Meta Platforms, and Alphabet invest heavily in AI capabilities, Nvidia’s processors have become essential in building the infrastructure required for this emerging technology.
“Nvidia is capitalizing on AI right now, while companies like Apple and Meta are investing in it,” commented Jake Dollarhide, CEO of Longbow Asset Management. “It’s possible that Nvidia could overtake Microsoft as well. There’s significant investor interest in what they perceive as a clear upward trajectory.”
Microsoft remains the world’s most valuable company, with a market value of $3.15 trillion after its shares climbed 1.9%. However, the rapid growth of Nvidia suggests a potential reshaping of the industry’s top rankings.
Nvidia is also preparing for a ten-for-one stock split effective June 7, a move anticipated to make its shares more accessible to individual investors and potentially boost demand further.
In contrast, Apple faces challenges with declining iPhone demand and intensifying competition in the Chinese market, the world’s largest for smartphones. Additionally, some investors view Apple as trailing behind other tech leaders in integrating AI features into its products and services.
Despite Nvidia’s stock surging 147% in 2024, analysts project that the company’s future earnings growth will continue to justify its valuation. Currently trading at 39 times expected earnings, Nvidia is considered less expensive on a forward earnings basis than it was a year ago, according to LSEG data.
The tech industry is witnessing a paradigm shift as AI becomes increasingly central to business strategies. Nvidia’s recent achievements highlight the growing importance of AI technology and its potential to redefine market leadership.
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Nvidia overtakes Apple as world's second-most valuable company
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