Nvidia has officially taken the crown from Apple as the world’s most valuable company, thanks to an explosive surge in its stock driven by high demand for its artificial intelligence chips.
On Friday, Nvidia’s market value hit a staggering $3.53 trillion, just ahead of Apple’s $3.52 trillion, according to data from LSEG.
At the end of the trading day, Nvidia was valued at $3.47 trillion after a 0.8% increase, while Apple’s shares climbed 0.4% to reach $3.52 trillion. Nvidia previously held the top spot briefly in June before being surpassed by tech giants like Microsoft and Apple.
Currently, Microsoft is valued at $3.18 trillion, up 0.8%. Nvidia, known for its chips used in gaming, has become a key player in AI computing, benefiting greatly from the race among tech giants like Microsoft, Alphabet, and Meta Platforms to lead in this fast-evolving field.
Nvidia’s stock has skyrocketed about 18% this October alone, particularly following a $6.6 billion funding announcement from OpenAI, the creator of ChatGPT. The semiconductor company’s shares received an additional boost when Western Digital reported better-than-expected quarterly profits, enhancing hopes for strong data center demand.
Investment director Russ Mould from AJ Bell noted, “More companies are embracing AI, and demand for Nvidia’s chips remains strong.” He added that Nvidia is in a “sweet spot,” as long as there isn’t a major economic downturn in the U.S.
Nvidia’s shares reached an all-time high recently, following impressive earnings from TSMC, the largest contract chipmaker, which reported a remarkable 54% profit increase fueled by AI chip demand.
On the flip side, Apple is facing challenges with a slowdown in iPhone sales, particularly in China, where sales dipped 0.3% in the third quarter. In contrast, Huawei’s phone sales soared by 42%.
As Apple prepares to release its quarterly results soon, analysts expect its revenue to rise by 5.55% year over year to $94.5 billion. Meanwhile, Nvidia’s revenue is projected to grow by nearly 82% to $32.9 billion.
The stock performances of Nvidia, Apple, and Microsoft significantly impact the technology sector and the broader U.S. stock market, representing about 20% of the S&P 500 index.
Optimism about AI, anticipated U.S. interest rate cuts, and a positive earnings season have all contributed to the S&P 500 reaching an all-time high recently.
Nvidia’s phenomenal growth has made it a favorite among option traders, with its stock being one of the most traded in recent months. Its shares have surged nearly 190% this year, fueled by the AI boom and impressive forecasts.
The burning question now is whether this revenue growth is sustainable or just an emotional investment bubble. As Rick Meckler from Cherry Lane Investments points out, Nvidia is likely to see impressive numbers in the near future.