USA – Nvidia has briefly surpassed Apple as the most valuable company globally, with a market capitalization reaching US $3.44 trillion.
This marks another milestone in the GPU technology company’s rapid ascent, driven largely by the surging demand for its graphics processing units (GPUs), which are essential for powering generative AI applications like OpenAI’s ChatGPT.
Nvidia, which designs around 75% of the world’s AI accelerators, has seen an “insane” increase in demand for its semiconductors.
As a result, the company’s earnings have surged from US $2.3 billion in the first half of 2022 to US $31.5 billion in the first half of 2024.
Its stock price has skyrocketed by 850% over the past two years. However, Nvidia’s stock is currently down 4.8% from its all-time high on October 21, while Apple’s shares have fallen by 6.7%, leading to Nvidia briefly overtaking Apple in market value.
While Nvidia’s stock has been on the rise, Apple, despite surpassing Wall Street expectations in its earnings report, has seen a more tempered reaction.
Apple’s revenue for 2024 is projected to be US $397 billion, with net income of US $98 billion, far surpassing Nvidia’s projected US $120 billion in sales and US $64 billion in net profit.
However, analysts predict that Nvidia’s growth trajectory will continue, with projected profits of US $122 billion by 2026, nearly catching up to Apple’s US $124 billion.
Intense battle among tech giants
The competition for the title of the world’s most valuable company has been fierce, especially with Nvidia, Apple, and Microsoft—the only companies with market caps above US $3 trillion—competing for dominance.
Microsoft, which has also seen significant gains, now has a market value of nearly $3.08 trillion, contributing to the neck-and-neck battle among these tech titans.
Nvidia’s dominance in AI semiconductors has been a key factor in its success, as tech giants like Meta, Google, and Microsoft pour billions into AI infrastructure, much of which relies on Nvidia’s products.
AI driving Nvidia’s meteoric rise
Nvidia’s transformation from a video game processor company to the leading supplier of AI chips is a reflection of the growing importance of AI in the tech sector.
The company, which was worth just US $1.2 trillion at the start of the year, has seen its market cap skyrocket in response to the growing reliance on AI technology.
The company has become the biggest beneficiary in the race among Microsoft, Alphabet, Meta, and others to dominate AI.
Nvidia’s rapid growth has also boosted its popularity with option traders, making its stock one of the most traded in recent months.
