Updated June 6th, 2024 at 09:05 IST

Nvidia overtakes Apple to become world’s second most valuable company

Nvidia's stock surged 5.2 per cent, closing at $1,224.40, valuing the company at $3.012 trillion.

Reported by: Business Desk
Nvidia CEO Jensen Huang | Image:Nvidia CEO Jensen Huang
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Nvidia’s AI boom: Nvidia soared to record highs on Wednesday, with the artificial intelligence chipmaker's valuation surpassing the $3 trillion mark, overtaking Apple to become the world's second most valuable company.

Nvidia is set to split its stock ten-for-one, effective on June 7, a move anticipated to attract individual investors. The rise in Nvidia's market value above Apple's signifies a shift in Silicon Valley, where Apple, co-founded by Steve Jobs, has dominated since the iPhone's launch in 2007.

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Nvidia's stock surged 5.2 per cent, closing at $1,224.40, valuing the company at $3.012 trillion. In comparison, Apple's market capitalisation stood at $3.003 trillion after a 0.8 per cent increase in its stock price. Microsoft, based in Redmond, Washington, remained the world's most valuable company at $3.15 trillion following a 1.9 per cent rise in its shares.

"Nvidia is profiting from AI now, whereas companies like Apple and Meta are currently investing in AI," commented Jake Dollarhide, CEO of Longbow Asset Management. "It seems likely that Nvidia will overtake Microsoft as well, with substantial retail investment pushing the stock higher."

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Nvidia's stock has surged 147 per cent in 2024, driven by high demand for its premium processors from companies like Microsoft, Meta Platforms, and Google-owner Alphabet, all striving to enhance their AI computing capabilities and lead in emerging technology.

The company's stock has rallied nearly 30 per cent since May 22, following an impressive revenue forecast. Nvidia added nearly $150 million to its market capitalisation on Wednesday, exceeding the entire value of AT&T (T.N).

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AI optimism boosted chip stocks broadly on Wednesday, with the PHLX chip index (.SOX) climbing 4.5 per cent. Super Micro Computer (SMCI.O), which sells AI-optimized servers equipped with Nvidia chips, rose 4 per cent.

Nvidia CEO Jensen Huang was recently the focus of extensive media coverage in Taiwan during the Computex tech trade fair in Taipei, his birthplace before relocating to the United States.

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While Nvidia enjoys a surge of AI enthusiasm on Wall Street, Apple faces weak iPhone demand and stiff competition in China, the world's largest smartphone market. Some investors view Apple as lagging behind other tech giants in integrating AI features into their products and services.

Analysts' forecasts for Nvidia's future earnings have outpaced its remarkable stock gains. Nvidia is trading at 39 times expected earnings, a more favourable ratio than a year ago when it traded at over 70 times expected earnings, according to LSEG data.

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(With Reuters inputs)

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Published June 6th, 2024 at 09:05 IST