Nvidia’s ascent to record highs on Wednesday marked a historic milestone, as the artificial intelligence chipmaker’s valuation surpassed $3 trillion, overtaking Apple to become the world’s second most valuable company.
The company’s impending ten-for-one stock split, scheduled for June 7, is expected to enhance its attractiveness to individual investors, potentially fueling further growth.
Nvidia’s surge in market value above Apple signifies a significant shift in Silicon Valley, traditionally dominated by the iPhone pioneer since 2007.
With Nvidia’s stock rising 5.2% to $1,224.40, its market capitalization reached $3.012 trillion, eclipsing Apple’s $3.003 trillion valuation, despite Apple’s 0.8% stock climb.
Microsoft retained its position as the world’s most valuable company at $3.15 trillion, with its shares rising 1.9%.
Nvidia’s success in AI, coupled with significant investments from companies like Apple and Meta, contributes to its meteoric rise, prompting speculation about potentially surpassing Microsoft’s valuation.
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The company’s stock has surged 147% in 2024, driven by robust demand for its cutting-edge processors amid a race among tech giants to dominate AI computing.
Nvidia’s recent revenue forecast further fueled investor enthusiasm, driving a nearly 30% increase in its stock since May 22.
Optimism about AI technology also buoyed chip stocks broadly, with the PHLX chip index jumping 4.5%, and Super Micro Computer, a provider of AI-optimized servers featuring Nvidia chips, climbing 4%.
CEO Jensen Huang’s prominence in the tech industry was highlighted during his visit to the Computex tech trade fair in Taipei, where he received significant attention.
While Nvidia thrives on AI innovation, Apple faces challenges, including weak iPhone demand and competition in China’s smartphone market.
Investors view Nvidia as leading the AI race, while Apple is perceived as lagging in integrating AI features into its products and services.
Analysts remain bullish on Nvidia’s future earnings potential, with expectations outpacing its remarkable stock gains. Despite its stellar performance, Nvidia trades at a relatively lower price-to-earnings ratio compared to the previous year, reflecting favorable valuation metrics.
