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Nvidia Nears Apple in Market Cap as AI Demand Fuels Record Surge

AInvestMonday, Oct 14, 2024 10:00 pm ET
1min read

Nvidia's stock recently surged to a new record high, climbing 2.43% to close at $138.07, which boosted its market capitalization to approximately $3.39 trillion. This increase places Nvidia tantalizingly close to Apple, whose market cap stands at $3.52 trillion, and it surpasses Microsoft's $3.12 trillion. Nvidia briefly held the title of the world's most valuable company in June.

The soaring demand for artificial intelligence (AI) chips has been a crucial driver of Nvidia's stock performance, with shares appreciating over 186% year-to-date. Analysts have noted that Nvidia's dominance in the AI accelerator market remains unchallenged, with the company expected to double its GPU sales to tech giants like Alphabet's Google and Microsoft.

Nvidia's CEO Jensen Huang has addressed concerns over potential delays in the release of Blackwell chips due to engineering issues. He confirmed that Blackwell is in full production and enjoying robust demand. Goldman Sachs highlighted the extensive pre-order backlog, indicating that Nvidia's supply would remain constrained for the foreseeable future.

The company also benefits from broader market trends, such as Taiwan Semiconductor Manufacturing Company's (TSMC) robust recent revenue numbers and OpenAI's successful round of financing, which underline strong AI demand. In addition, Nvidia's strategic investments further bolster its competitive position in the tech landscape.

Industry experts are bullish about Nvidia's prospects, with a significant majority of analysts recommending a "buy" rating. The company has crafted a strong moat with its GPU technology, largely due to its extensive investments in proprietary software and CUDA platforms, locking in AI engineers worldwide.

While some concerns linger about potential overvaluation or a saturated market, Nvidia continues to invest heavily in innovation and infrastructure, ensuring its standing at the forefront of AI development. This strategic foresight is expected to positively impact its financial performance and stock price in the coming years.

Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.