Nvidia Surpasses Apple to Become Second Most Valuable Company
Nvidia’s remarkable rally to record highs on Wednesday saw the artificial intelligence chipmaker’s valuation soar past the $3 trillion mark, eclipsing Apple and securing its position as the world’s second most valuable company. This significant shift marks a departure from Silicon Valley’s traditional dominance by Apple, particularly since the launch of the iPhone in 2007.
Nvidia’s stock surged by 5.2% to close at $1,224.40, resulting in a market capitalization of $3.012 trillion, outstripping Apple’s $3.003 trillion valuation. The impending ten-for-one stock split, scheduled for June 7, is expected to enhance Nvidia’s appeal to individual investors, potentially amplifying its market momentum.
With Nvidia’s profitability in the AI sector contrasting with the expenditure of companies like Apple and Meta on AI technologies, industry observers foresee Nvidia potentially surpassing Microsoft as well. This surge is fueled by retail investors capitalizing on what they perceive as a lucrative trajectory for Nvidia’s stock.
Nvidia’s stock surge aligns with the burgeoning demand for its premier processors, which significantly outpaces supply. Major tech players like Microsoft, Meta Platforms, and Alphabet are aggressively investing in AI computing capabilities, amplifying Nvidia’s market dominance in the emerging technology landscape.
Nvidia’s stock has witnessed a staggering 147% surge in 2024 alone, with a notable 30% increase since its latest stellar revenue forecast on May 22. The company’s market capitalization rose by nearly $150 billion on Wednesday alone, surpassing the total value of AT&T. As Nvidia continues to ride the wave of AI enthusiasm, Apple faces challenges stemming from sluggish iPhone demand and stiff competition in crucial markets like China.
Nvidia CEO Jensen Huang’s prominence was underscored by extensive media coverage in Taiwan and a fervent reception at the Computex tech trade fair in Taipei. While Nvidia garners accolades, Apple grapples with perceptions of lagging behind its tech counterparts in integrating AI features into its products and services.
Analysts project robust future earnings for Nvidia, surpassing its already impressive stock gains. Despite trading at 39 times expected earnings, Nvidia remains less expensive compared to its valuation a year ago, indicating sustained growth potential amidst its market ascendancy.
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