Nvidia Surpasses Apple in Market Cap Amid AI Chip Boom
1min read Nvidia briefly reclaimed its status as the world's most valuable company, surpassing Apple, driven by strong demand for its specialized AI chips. On Friday, Nvidia's stock reached an all-time high, with market capitalization momentarily hitting $3.53 trillion, slightly above Apple's $3.52 trillion. By the end of the trading day, Nvidia's market cap settled at $3.47 trillion, with a 0.8% increase in stock price, while Apple's market cap recorded a $3.52 trillion valuation, with a 0.4% rise.
Earlier in June, Nvidia briefly topped global valuations but was soon overtaken by Microsoft and Apple. These tech giants have been in close competition for months, collectively representing around a fifth of the S&P 500 index's weight.
Nvidia's shares have surged nearly 190% this year, with an 18% rise in October following OpenAI's announcement of a $6.6 billion funding round. Western Digital's positive profit report also fueled optimism for data center demand, propelling Nvidia's and other semiconductor stocks upward.
According to AJ Bell's investment director, Russ Mould, demand for Nvidia's chips remains robust as more companies incorporate AI into their operations. He noted that as long as the U.S. avoids a significant recession, companies are expected to keep investing heavily in AI, providing Nvidia with substantial growth.
In contrast, Apple is grappling with weakened smartphone demand. Analysts anticipate its quarterly revenue to grow by 5.55% to $94.5 billion, while Nvidia's revenue is expected to rise nearly 82% to $32.9 billion.
The notable upswing in Nvidia's share price has also made it attractive to options traders, with its options being among the most traded in recent months. Nvidia's stock has risen nearly 190% this year, fueled by the generative AI boom and strong performance forecasts.
Cherry Lane Investments partner Rick Meckler highlighted Nvidia's outstanding short-term performance, driven by investor sentiment amidst discussions on whether AI's potential is overhyped. He emphasized the question remains whether this revenue stream can sustain long-term growth independently of sentiment.
