Nvidia’s shares rallied about 6% to a record high on Tuesday, bringing the AI chipmaker’s market value to just $100 billion shy of overtaking Apple in a significant shift among Wall Street’s largest companies.
Nvidia’s shares last traded at $1,128, with a market capitalization of $2.8 trillion, while Apple’s market value stood at $2.9 trillion, making it the second-most valuable company after Microsoft.
During the session, Nvidia’s stock surged up to 8% to $1,149.39, setting an intra-day high. Apple’s stock fell by 0.2% in afternoon trading.
Nvidia’s shares have risen nearly 13% since it forecast second-quarter revenue above Wall Street expectations last week and announced a stock split, which excited investors.
Derren Nathan, head of equity analysis at Hargreaves Lansdown, commented, “The market is struggling to keep up with the company’s growing trajectory. At a mid-thirties forward earnings multiple, this doesn’t feel like bubble territory.” Nvidia recently traded at 36 times its forward profit estimates, compared with 38 for Advanced Micro Devices and 21 for Intel, according to LSEG data.
Nvidia’s shares have more than doubled this year after tripling last year. The company, benefiting significantly from the AI boom, reported a five-fold revenue increase in its data center segment last week due to high demand for its high-performance chips. Companies like Alphabet, Microsoft, and Amazon are competing for Nvidia’s high-end chips to lead in AI computing.
Dan Coatsworth, investment analyst at AJ Bell, said, “Business is doing incredibly well, with many growth opportunities, and the AI theme is still strong. Investors are keen to continue supporting it.” Apple, traditionally a top stock on Wall Street, has underperformed other Big Tech companies recently, falling about 2% this year due to weak iPhone demand and tough competition in China.
Microsoft surpassed Apple as the world’s most valuable company earlier this year, benefiting from early AI investments in its cloud services. Microsoft’s shares fell 0.4% on Tuesday, with a market value of $3.1 trillion. Apple has been slower in rolling out generative AI compared to rivals like Microsoft and Google, which are integrating AI into their products.
