Nvidia’s market valuation exceeded Apple’s, positioning it as the world’s second most valuable company. This growth was driven by a stock split and a surge in demand for its AI processors. Nvidia reached record highs on Wednesday, with the AI chipmaker’s valuation surpassing the $3 trillion mark and overtaking Apple as the world’s second most valuable company. The company is set to conduct a ten-for-one stock split on June 7, potentially boosting its attractiveness to individual investors.
Nvidia’s climb in market value above Apple signals a pivotal change in Silicon Valley, traditionally dominated by Apple since the iPhone’s debut in 2007. Nvidia’s shares increased by 5.2% to close at $1,224.40, bringing its valuation to $3.012 trillion, slightly above Apple’s last recorded $3.003 trillion market cap after a 0.8% rise in its shares.
Microsoft remains the most valuable company globally, with a valuation of $3.15 trillion, following a 1.9% increase in its shares.Jake Dollarhide, CEO of Longbow Asset Management, noted that Nvidia is currently profiting from AI, while companies like Apple and Meta are heavily investing in it. He also suggested that Nvidia might soon outpace Microsoft, fueled by substantial retail investment.
Nvidia’s shares have soared 147% in 2024, with demand for its high-end processors greatly exceeding supply as major tech firms like Microsoft, Meta Platforms, and Alphabet vie to expand their AI computing capabilities. Since May 22, when Nvidia issued an impressive revenue forecast, its stock has risen nearly 30%. On Wednesday alone, Nvidia added nearly $150 million to its market capitalization, exceeding AT&T’s total value. Overall optimism about AI contributed to a broad rally in chip stocks, with the PHLX chip index jumping 4.5% and Super Micro Computer, which utilizes Nvidia chips in its AI-optimized servers, climbing 4%.
Nvidia CEO Jensen Huang received extensive coverage on Taiwanese television and was greeted enthusiastically at the Computex tech trade fair in Taipei, his birthplace, before he moved to the United States. While Nvidia benefits from the current AI enthusiasm on Wall Street, Apple faces challenges such as declining iPhone demand and stiff competition in China, the largest smartphone market globally. Some investors also see Apple as trailing behind other tech giants in integrating AI into their products and services.
Despite Nvidia’s significant stock gains, analysts’ projections for future earnings suggest that the stock, trading at 39 times expected earnings, is relatively less expensive compared to last year when it was over 70 times, according to LSEG data.
