In a seismic shift in the tech landscape, Nvidia surpassed Apple on Wednesday to become the world's second most valuable company. The AI chipmaker's valuation breached the $3 trillion mark, fueled by an insatiable demand for its processors, which power the emerging field of artificial intelligence.
Nvidia's stock surged 5.2% to close at $1,224.40, bringing its market capitalisation to $3.012 trillion. This surge edges out Apple, whose market cap settled at $3.003 trillion after a modest 0.8% gain. Microsoft retains its top spot with a market value of $3.15 trillion.
The surge in Nvidia's stock price, a staggering 147% increase since the start of 2024, underscores the company's pivotal role in the AI revolution. Tech giants like Microsoft, Meta, and Google-parent Alphabet are all vying for Nvidia's high-performance chips to bolster their AI capabilities.
This remarkable growth spurt follows Nvidia's stellar revenue forecast announced on May 22nd, which sent shockwaves through the market and propelled the stock up by nearly 30%. The company's upcoming ten-for-one stock split, effective June 7th, is expected to further fuel interest from individual investors.
Nvidia's dominance reflects a broader trend in the tech sector, with AI emerging as a key battleground. The company's CEO, Jensen Huang, has become a global tech icon, drawing massive crowds at events like the recent Computex trade fair in Taipei.
Meanwhile, Apple faces challenges from slowing iPhone sales and intensifying competition in the crucial Chinese market. Some analysts also suggest the tech giant is lagging behind in integrating AI into its products and services.
Despite its impressive growth, Nvidia's stock remains attractive based on future earnings projections. The company currently trades at 39 times expected earnings, down significantly from its previous high of over 70 times expected earnings a year ago.