Nvidia surpassed Apple in market capitalization on Wednesday as investors continue to bet on the chipmaker driving the artificial intelligence boom. It now ranks as the second-most valuable public company, behind Microsoft. This is according to CNBC, the real-time financial market coverage entity.
$3 trillion milestone
Nvidia also reached a $3 trillion market cap milestone on Wednesday after shares rose over 5%. At market close, Nvidia had a market value of $3.019 trillion, compared to Apple’s $2.99 trillion. As of Wednesday, Microsoft leads as the most valuable publicly traded company, with a market cap of $3.15 trillion.
Nvidia shares have surged more than 24% since the company reported first-quarter earnings in May and have seen significant growth since last year. The company boasts an estimated 80% market share in AI chips for data centers, attracting substantial spending from major cloud vendors.
Investors confident and firm
Investors are increasingly confident in Nvidia’s ability to sustain its substantial sales growth to leading cloud companies. In the latest quarter, revenue in its data center business, including GPU sales, soared 427% from a year earlier to $22.6 billion, comprising about 86% of the company’s total sales.
Meanwhile, Apple shares have only risen about 5% this year, with sales growth stalling in recent months. In its most recent quarterly earnings report, Apple reported a 4% drop in overall sales and a 10% decline in iPhone sales compared to the year-ago period. Apple faces strategic concerns regarding demand in China, manufacturing, and mixed reactions to its new virtual reality headset, Vision Pro.
Apple surpassed by Microsoft early this year
Apple was the first company to reach a $1 trillion and $2 trillion market cap, previously holding the title of most valuable U.S. company until being surpassed by Microsoft earlier this year. Microsoft has also benefited from investor demand for AI infrastructure.
Nvidia has exhibited greater stock volatility than Apple. Founded in 1991, the company initially focused on gaming hardware for 3D computer games. More recently, it has ventured into cryptocurrency mining chips and cloud subscription services.
Nvidia shares have soared as its AI business has expanded, rising more than 3,290% over the past five years. The company announced a 10-for-1 stock split in May.
Source: CNBC
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