Nvidia overtakes Apple as world’s second-most valuable company

June 06, 2024 (MLN): Nvidia Corp. was already the world's most valuable semiconductor firm. Now, it’s become the first computer-chip company ever to hit $3 trillion in market capitalization, and is also now the world's second-most valuable company, as reported by Bloomberg.

The shares of the Santa Clara, California-based firm have rallied roughly 147% this year, adding about $1.8tr as the insatiable demand for its chips used to power artificial intelligence tasks skyrockets.

On Wednesday, shares rose 5.2% to close at a record $1,224.40, pushing the market value to more than $3tr and overtaking Apple Inc. in the process.

The last time Nvidia was worth more than Apple was in 2002, five years before the first iPhone was released. At the time, both companies were worth less than $10 billion each.

Nvidia has shown no signs of slowing down or letting its rivals catch up; the company’s Chief Executive Officer Jensen Huang said the firm plans to upgrade its so-called AI accelerators every year.

Wednesday’s stock gain increased his wealth by more than $5bn to $107.4bn, according to the Bloomberg Billionaires Index.

The rise of generative AI is a new industrial revolution and Nvidia expects to play a major role as the technology shifts to personal computers, Huang told attendees at a keynote address at National Taiwan University.

“We see this sea change as in the very early innings,” said Angelo Zino, senior equity analyst at CFRA Research.

After the CEO’s keynote, Zino said he likes “the improved visibility” and sees “greater momentum on the GPU/CPU/networking side driving upside to consensus estimates.”

The company has been arguably the biggest beneficiary of a massive flood of AI spending, helping vault the company into a race to claim the title as the world’s most valuable company.

The chipmaker still trails Microsoft Corp. by market value, but with shares on a tear Wall Street sees it as only a matter of time before Nvidia overtakes it.

Apple has struggled this year with the technology giant’s shares pressured by concerns over cooling iPhone demand in China and a fine from the European Union.

Shares in the company have only recently turned positive for 2024 as investor sentiment toward the iPhone maker is slowly improving.

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