Nvidia at $3 Trillion surpasses Apple in market cap as second-most valuable company

 nvidia company

Nvidia soared to record highs on Wednesday, with the AI chipmaker’s valuation surpassing the $3 trillion mark and overtaking Apple to become the world’s second most valuable company.

Nvidia plans to split its stock ten-for-one on June 7, aiming to attract more individual investors. The rise in Nvidia’s market value above Apple’s represents a significant shift in Silicon Valley, which Apple, co-founded by Steve Jobs, has dominated since the launch of the iPhone in 2007.

Nvidia’s stock climbed 5.2% to close at $1,224.40, giving the company a valuation of $3.012 trillion. Meanwhile, Apple’s market capitalization was $3.003 trillion after its stock increased by 0.8%. Microsoft, based in Redmond, Washington, remained the world’s most valuable company at $3.15 trillion following a 1.9% rise in its shares.

Nvidia is profiting from AI right now, whereas companies like Apple and Meta are investing in AI. It seems inevitable that Nvidia will surpass Microsoft as well. A lot of retail investors are piling in, seeing it as a straight shot up. Nvidia’s stock has surged 147% so far in 2024, driven by soaring demand for its high-end processors as Microsoft, Meta Platforms, and Google-owner Alphabet race to enhance their AI computing capabilities and lead in this emerging technology.

Since May 22, when Nvidia released an exceptional revenue forecast, its stock has rallied nearly 30%. On Wednesday, Nvidia added nearly $150 million to its market capitalization, more than the entire value of AT&T. Optimism about AI boosted chip stocks broadly on Wednesday, with the PHLX chip index rising 4.5%. Super Micro Computer, which sells AI-optimized servers built with Nvidia chips, climbed 4%.

Nvidia CEO Jensen Huang received extensive media coverage in Taiwan this week and was greeted enthusiastically by attendees at the Computex tech trade fair in Taipei, where he was born before moving to the United States. While Nvidia rides a wave of AI enthusiasm on Wall Street, Apple is grappling with weak iPhone demand and stiff competition in China, the world’s largest smartphone market.

Some investors also believe Apple is lagging behind other tech giants in integrating AI features into their products and services.

Analysts’ projections for Nvidia’s future earnings have outpaced its impressive stock gains. Nvidia is trading at 39 times expected earnings, making it more affordable on that basis than a year ago when it traded at over 70 times expected earnings, according to LSEG data.

-Lavanya Yadav@Wondernext


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