Nvidia Surpasses Apple to Become the Second Most Valuable Company
Nvidia surpasses Apple to become the world's second most valuable company with a market valuation of over $3 trillion. The company's stock has surged by 147% in 2024, driven by the high demand for its AI processors. Nvidia's upcoming stock split and appeal to individual investors contribute to its increasing market value.
This milestone marks a significant shift in Silicon Valley, where Apple, co-founded by Steve Jobs, has long dominated since the launch of the iPhone in 2007. Nvidia's stock rose by 5.2% to close at $1,224.40, valuing the company at $3.012 trillion. In comparison, Apple's market capitalisation stood at $3.003 trillion after a modest 0.8% increase in its stock.
While Microsoft remains the world's most valuable company at $3.15 trillion, Nvidia's rapid ascent suggests it may soon overtake even the tech giant. Jake Dollarhide, CEO of Longbow Asset Management, believes that Nvidia's success is driven by its profitability in the field of artificial intelligence, while companies like Apple and Meta are investing heavily in AI technologies.
Nvidia's stock has experienced a remarkable surge of 147% in 2024, with the demand for its high-performance processors far exceeding supply. This surge has been fueled by major players such as Microsoft, Meta Platforms, and Alphabet's Google, who are racing to establish their dominance in AI computing capabilities.
The company's recent stellar revenue forecast has further boosted investor confidence, leading to a nearly 30% increase in Nvidia's stock since May 22. On Wednesday alone, Nvidia added nearly $150 million in market capitalisation, surpassing the entire value of AT&T.
The optimism surrounding AI has also had a positive impact on chip stocks, with the PHLX chip index surging by 4.5%. Super Micro Computer, a company that sells AI-optimised servers built with Nvidia chips, experienced a 4% increase in its stock.
Nvidia's CEO, Jensen Huang, has been in the spotlight recently, receiving extensive coverage on Taiwanese television during his visit to the Computex tech trade fair in Taipei, his birthplace. This attention reflects the growing recognition of Nvidia's leadership in the AI industry.
In contrast, Apple is facing challenges with weak demand for iPhones and fierce competition in China, the largest smartphone market globally. Some investors perceive Apple as lagging behind other tech giants in integrating AI features into their products and services.
Despite Nvidia's remarkable stock gains, analysts' projections for future earnings continue to outpace its current performance. The company is currently trading at 39 times expected earnings, making it relatively less expensive compared to a year ago when it traded at over 70 times expected earnings.
Nvidia surpasses Apple to become the world's second most valuable company with a market valuation of over $3 trillion.
The company's stock has surged by 147% in 2024, driven by the high demand for its AI processors.
Nvidia's upcoming stock split and appeal to individual investors contribute to its increasing market value.
Source: REUTERS