On Monday, Nvidia's stock surged, propelling its market capitalization to surpass Apple's, positioning the chipmaker as the world's largest company by value. According to Dow Jones market data, Nvidia's market cap reached $3.365 trillion, slightly ahead of Apple's $3.338 trillion.
The uptick in Nvidia's market value appears to be driven by continued spending from major tech companies alongside its upcoming inclusion in the Dow Jones Industrial Average. This shift, replacing Intel in the index, was announced by S&P Dow Jones Indices as an effort to ensure a representative exposure to the semiconductor industry.
While inclusion in the Dow Jones is unlikely to directly increase investor interest in Nvidia due to fewer funds tracking this index compared to the broader S&P 500, it solidifies Nvidia's status as a leading name in U.S. chip stocks.
A more fundamental factor driving Nvidia's stock price is the consistent investment by large tech companies in AI infrastructure, notably for Nvidia’s Blackwell processors. This focus on AI and high-performance computing has allowed Nvidia to capture a significant share of the data center market, contributing to its valuation leap.
In the first half of 2023, Nvidia's market cap was still below $1 trillion, ranking below tech giants like Alphabet, Amazon, Apple, and Microsoft. However, Nvidia crossed the $1 trillion market value mark in June 2023, reached $2 trillion by February 2024, and achieved $3 trillion in June 2024, marking one of the fastest growths in market valuation history.
After touching the $3 trillion mark in June, Nvidia briefly overtook Apple, which later regained the top spot post its Worldwide Developers Conference, where it revealed new ventures into the AI space. This competition between tech giants foreshadows a possible battle for a $4 trillion market cap next year, with Nvidia, Apple, and Microsoft in contention.