Nvidia Surpasses Apple to Become World’s Second Most Valuable Company

Nvidia Overtakes Apple to Become the World's Second Most Valuable Company

Nvidia’s stock (NVDA.O) soared to new record highs on Wednesday, with the artificial intelligence chipmaker’s valuation surpassing $3 trillion. This surge has propelled Nvidia past Apple (AAPL.O), making it the world’s second most valuable company.

Nvidia is set to implement a ten-for-one stock split on June 7, potentially attracting more individual investors.

This milestone in Nvidia’s market value signals a significant shift in Silicon Valley, where Apple, co-founded by Steve Jobs, has dominated since the iPhone’s debut in 2007.

On Wednesday, Nvidia’s stock climbed 5.2% to close at $1,224.40, bringing its market capitalization to $3.012 trillion. In comparison, Apple’s market cap stood at $3.003 trillion after a 0.8% rise in its stock price.

Microsoft (MSFT.O) remains the world’s most valuable company at $3.15 trillion, following a 1.9% increase in its shares.

“Nvidia is currently profiting from AI, whereas companies like Apple and Meta are investing heavily in it,” commented Jake Dollarhide, CEO of Longbow Asset Management. “It’s possible Nvidia might surpass Microsoft as well, given the significant influx of retail investment.”

Nvidia’s stock has skyrocketed by 147% in 2024, driven by high demand for its top-tier processors as companies like Microsoft, Meta Platforms (META.O), and Alphabet (GOOGL.O) vie to expand their AI computing capabilities. Since May 22, when Nvidia released its latest impressive revenue forecast, the stock has surged nearly 30%.

Nvidia Passes Apple in Market Cap

On Wednesday alone, Nvidia added nearly $150 million in market capitalization, surpassing the entire value of AT&T (T.N).

Optimism around AI boosted chip stocks broadly, with the PHLX chip index (.SOX) jumping 4.5%. Super Micro Computer (SMCI.O), which sells AI-optimized servers using Nvidia chips, also saw a 4% rise.

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, his birthplace before he moved to the United States.

While Nvidia benefits from AI enthusiasm on Wall Street, Apple faces challenges with weak iPhone demand and stiff competition in China, the largest smartphone market globally. Some investors view Apple as lagging behind other tech giants in integrating AI features into their products and services.

Analysts’ earnings projections for Nvidia have outpaced its significant stock gains. Nvidia is now trading at 39 times expected earnings, a decrease from last year’s 70 times expected earnings, according to LSEG data.

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