On Friday, Nvidia surpassed Apple as the world’s most valuable company following a record-breaking stock surge, fueled by immense demand for its specialized AI chips. Nvidia’s market cap briefly reached $3.53 trillion, slightly higher than Apple’s $3.52 trillion, according to LSEG data.
Nvidia shares ended the day up 0.8%, totaling a $3.47 trillion valuation, while Apple’s rose 0.4%, reaching $3.52 trillion. In June, Nvidia briefly held the top spot before Microsoft and Apple reclaimed higher valuations. Microsoft currently holds a $3.18 trillion valuation.
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As the leading supplier of AI processors, Nvidia has benefited from a strong market position amid competition with Microsoft, Alphabet, Meta, and others. Originally known for gaming chips, Nvidia’s stock has risen around 18% in October, following a $6.6 billion funding round announcement by OpenAI, the developer of ChatGPT.
Semiconductor stocks, including Nvidia, saw gains Friday after Western Digital reported better-than-expected quarterly profits, boosting confidence in data center demand. Investment director Russ Mould noted that growing interest in AI among companies and sustained demand for Nvidia chips, barring a severe U.S. economic downturn, create a favorable environment for the company.
Nvidia stock hit a record on Tuesday, continuing its upward trend after a profit surge from TSMC, the largest contract chipmaker. Apple, on the other hand, faces slower smartphone demand, with a 0.3% decline in iPhone sales in China while Huawei’s rose by 42%.
Apple’s upcoming earnings report is expected to show 5.55% annual revenue growth, while Nvidia is projected to reach nearly 82% growth. Nvidia, Apple, and Microsoft together contribute significantly to the U.S. technology sector and broader stock market, comprising about a fifth of the S&P 500’s value. Optimism around AI and potential Federal Reserve rate cuts have helped propel the S&P 500 to recent highs.
Nvidia’s remarkable gains have also made it a popular choice among options traders. With nearly a 190% rise this year, the company’s growth reflects the surge in generative AI. However, Rick Meckler of Cherry Lane Investments points out the question of whether Nvidia’s success will be sustainable, noting that investor enthusiasm around AI could be driving stock performance more than clear, long-term revenue projections.
