Nvidia overtook Apple as the world’s most valuable company on Friday, following a record-setting rally in its stock fueled by insatiable demand for its new supercomputing AI chips.
Nvidia’s stock market value briefly reached $3.53 trillion, while Apple’s was $3.52 trillion, according to LSEG data.
In June, Nvidia briefly became the world’s most valuable company, before it was overtaken by Microsoft and Apple. The market capitalization of the tech trio has been neck-and-neck for several months. Microsoft’s market value was $3.20 trillion.
Nvidia’s stock is up nearly 18% so far in October, continuing its gains after announcing a $6.6 billion funding round by OpenAI, the company behind ChatGPT. Nvidia provides chips used to train so-called foundation models, such as OpenAI’s GPT-4.
“More companies are now adopting artificial intelligence in their everyday operations and demand for Nvidia chips remains strong,” said Russ Mould, investment director at AJ Bell.
“It is certainly a good position to be in and as long as we avoid a major economic recession in the United States, there is a sentiment that companies will continue to invest heavily in AI capabilities, creating a healthy tailwind for Nvidia.” will be.”
Shares of Nvidia hit a record high on Tuesday, building on last week’s surge when TSMC, the world’s largest contract chip maker, reported a forecast 54% jump in quarterly profit due to surging demand for chips used in AI. Entered.
The next big test will come when Nvidia reports third-quarter results in November. Nvidia in August projected third-quarter revenue of $32.5 billion, plus or minus 2%, while the current average analysts were expecting $32.90 billion, according to data compiled by LSEG.
Morgan Stanley analyst Joseph Moore said in an Oct. 10 note that he remains “very optimistic” about the company over the long term, but that the recent rally “has overstated earnings levels somewhat.”
After a meeting with Nvidia CEO Jensen Huang, Moore said production growth for its next-generation Blackwell chips appears to be “pretty strong” and is booked for 12 months. The stock came under pressure in August after Nvidia confirmed reports it would delay production of Blackwell chips until the fourth quarter.
Shares of Nvidia, Apple and Microsoft have immense influence on the highly valued technology sector as well as the broader US stock market, with the three accounting for almost a fifth of the weighting of the S&P 500 index.
Hysteria over the prospects of AI, expectations that the US Federal Reserve will significantly lower interest rates, and most recently, an upbeat start to earnings season have driven the benchmark S&P 500 to all-time highs last week.
Nvidia’s massive gains have helped boost the stock’s appeal to options traders and the company’s options have been among the most traded on any given day in recent months, according to data from options analysis provider Trade Alerts.
The stock is up nearly 190% so far this year as the boom in generative AI prompted the company to issue a series of blockbuster forecasts.
Rick Meckler, partner at Cherry Lane Investments, said, “The question is whether the revenue stream will last long and that will be driven by investors’ sentiments rather than any ability to prove or disprove the thesis that AI is overhyped.” A family investment office in New Vernon, New Jersey.
“I think Nvidia knows that in the near future, their numbers are likely to be quite significant.”
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
