Nvidia’s market cap surpasses $3 trillion, marking a significant shift in Silicon Valley’s tech hierarchy.
Summary: Nvidia’s market cap breaks $3 trillion, surpassing Apple and highlighting its dominance in AI chip technology.
(AIM)—Nvidia’s stock price reached an all-time high on Wednesday, pushing its market capitalization beyond $3 trillion and surpassing Apple to become the world’s second most valuable company. This milestone challenges Apple’s longstanding dominance in Silicon Valley since the release of the iPhone in 2007.
The rise in Nvidia’s stock reflects the market’s high expectations for its AI chip technology. The company plans a ten-for-one stock split on June 7, aiming to attract more individual investors. Nvidia’s stock rose by 5.2% to close at $1,224.40, resulting in a market cap of $3.012 trillion. In contrast, Apple’s market cap settled at $3.003 trillion after a 0.8% increase in stock price.
Despite Nvidia’s rapid ascent, Microsoft remains the world’s most valuable company with a market cap of $3.15 trillion. According to Jake Dollarhide, CEO of Longbow Asset Management, “Nvidia is currently profiting greatly from the AI sector, while companies like Apple and Meta are heavily investing in AI.”
Nvidia’s stock has surged 147% so far in 2024, driven by overwhelming demand for its top-tier processors. Tech giants such as Microsoft, Meta, and Alphabet are racing to enhance their AI computing capabilities, aiming to dominate the emerging technology landscape. Following Nvidia’s impressive revenue forecast announcement on May 22, its stock has jumped nearly 30%. On Wednesday alone, Nvidia’s market cap increased by almost $150 billion, a figure that surpasses the total market cap of AT&T.
The optimistic sentiment around AI also buoyed other chip stocks, with the PHLX semiconductor index rising by 4.5%. Super Micro Computer, which sells AI-optimized servers featuring Nvidia chips, saw its stock price increase by 4%.
Nvidia CEO Jensen Huang has been highly visible this week, appearing frequently on Taiwanese television and receiving enthusiastic receptions at Taipei’s Computex technology trade show. While Nvidia rides the AI wave on Wall Street, Apple struggles with weakened iPhone demand and intensified competition in China, the world’s largest smartphone market. Some investors believe Apple is lagging in integrating AI features into its products and services compared to other tech giants.
Analysts’ projections for Nvidia’s future earnings have outpaced its strong stock performance. According to LSEG data, Nvidia’s price-to-earnings ratio stands at 39, making it a more attractive investment compared to the over 70 P/E ratio seen a year ago.
Nvidia’s remarkable growth underscores its leadership in the AI chip market and signifies a potential shift in the tech industry landscape. As Nvidia continues to innovate and capture market share, the competitive dynamics among tech giants like Apple, Microsoft, and Meta are poised for further transformation.
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Keywords: Nvidia, Apple, market capitalization, AI chip technology, Silicon Valley, stock market, Jensen Huang, Microsoft, AI investment, tech industry trends.