NEW YORK: Nvidia briefly surpassed Apple on Friday, Oct 25, becoming the world’s most valuable company as its stock soared, fuelled by strong demand for its artificial intelligence (AI) chips.
Nvidia’s market value reached US$3.53 trillion (S$4.66 trillion), just ahead of Apple’s US$3.52 trillion (S$4.65 trillion), according to data from LSEG.
According to Reuters, by the end of the day, Nvidia’s valuation closed at US$3.47 trillion (S$4.58 trillion), while Apple finished at US$3.52 trillion (S$4.65 trillion) after a slight stock rise.
In June this year, Nvidia briefly took the lead as the world’s most valuable company but was later overtaken by Microsoft and Apple. For months, these tech giants’ values have moved closely.
Microsoft’s market value currently sits at US$3.18 trillion (S$4.20 trillion), following a 0.8 per cent rise.
Nvidia has become a key player in AI technology. It dominates the supply of processors used in AI computing, with companies like Microsoft, Alphabet, and Meta Platforms racing to build a foothold in the rapidly evolving AI space.
Nvidia’s stock climbed roughly 18 per cent in October. This latest rise follows a funding round announcement from OpenAI, the company behind ChatGPT, which raised US$6.6 billion (S$8.72 billion).
Nvidia and other semiconductor stocks were boosted on Friday after data storage company Western Digital reported stronger-than-expected quarterly profits, boosting hopes for continued data centre demand.
Russ Mould, investment director at AJ Bell, commented that “more companies are now embracing artificial intelligence in their everyday tasks, and demand remains strong for Nvidia chips.”
He added that as long as the US avoids a “big economic downturn,” companies will keep investing in AI technology, “creating a healthy tailwind for Nvidia.”
Reuters reported that on Tuesday, Nvidia’s shares hit an all-time high, adding to its upward momentum from last week.
This recent surge followed a 54 per cent quarterly profit jump by TSMC, the world’s largest contract chipmaker, driven by high demand for AI chips.
Meanwhile, Apple is grappling with slower iPhone sales. In China, iPhone sales dipped by 0.3 per cent in the third quarter, while rival Huawei reported a 42 per cent surge in sales during the same period.
Despite this, LSEG data suggests that Apple is projected to report a 5.55 per cent revenue growth, with an expected US$94.5 billion (S$124.83 billion) in revenue in its quarterly results due Thursday.
Meanwhile, analysts expect Nvidia to post a revenue increase of nearly 82 per cent, with an estimated US$32.9 billion (S$43.46 billion) in revenue.
Shares of Nvidia, Apple, and Microsoft hold major influence over the high-value tech sector and the wider US stock market, making up about a fifth of the S&P 500 index’s weight.
Nvidia’s sharp rise has attracted option traders and has become one of the most actively traded, according to Trade Alert, an options analytics provider.
The stock has climbed nearly 190 per cent this year, fuelled by the generative AI boom.
Optimism about AI’s potential hopes for Federal Reserve interest rate cuts and a strong start to the earnings season lifted the S&P 500 to a record high last week.
However, some analysts question if Nvidia’s revenue growth “will last for a long time.”
Rick Meckler, partner at Cherry Lane Investments, noted that the “emotion of investors” around AI may be driving the numbers “rather than any ability to prove or disprove the thesis that AI is overdone.”
He added that he thinks that Nvidia knows that near-term, numbers are likely to be “quite remarkable.” /TISG
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