Nvidia surpassed Apple as the world’s most valuable company on Friday, driven by soaring demand for its AI supercomputing chips.
Nvidia’s stock market value reached $3.53 trillion, slightly ahead of Apple’s $3.52 trillion, according to LSEG data.
This marks Nvidia’s return to the top, having briefly held the title in June before being overtaken by Microsoft and Apple. Microsoft’s market value is currently at $3.20 trillion, according to Reuters.
Nvidia’s stock has increased approximately 18% in October, fueled by a series of gains following OpenAI’s announcement of a $6.6 billion funding round. Nvidia supplies the chips essential for training foundation models, including OpenAI’s GPT-4.
“More companies are now embracing artificial intelligence in their everyday tasks and demand remains strong for Nvidia chips,.
“It is certainly in a sweet spot and so long as we avoid a big economic downturn in the United States, there is a feeling that companies will continue to invest heavily in AI capabilities, creating a healthy tailwind for Nvidia, said the investment director at AJ Bell, Russ Mould.
Nvidia’s shares reached a record high on Tuesday, continuing a rally from last week after TSMC, the largest contract chipmaker, reported a 54% increase in quarterly profit due to strong demand for AI-related chips.
The next significant milestone will be Nvidia’s third-quarter results, set for November. In August, Nvidia projected third-quarter revenue of $32.5 billion, while analysts currently expect an average of $32.90 billion, according to LSEG data.
Morgan Stanley analyst Joseph Moore said in a note dated Oct. 10 that he remains “very bullish” about the company longer term, but the recent rally “raises the bar for earnings somewhat”.
After meeting with Nvidia CEO, Jensen Huang, Moore noted that the ramp-up in production of the next-generation Blackwell chips seems “quite strong,” with orders booked for 12 months.
Nvidia’s stock faced pressure in August when delays in Blackwell chip production were confirmed, pushing it to the fourth quarter.
Nvidia, Apple, and Microsoft significantly influence the technology sector and the broader U.S. stock market, together comprising about one-fifth of the S&P 500 index’s weight.
Enthusiasm for AI, expectations of significant interest rate cuts from the U.S. Federal Reserve, and a positive start to the earnings season have driven the S&P 500 to an all-time high last week.
