NVIDIA's market value surges closer to Apple amid AI boom
NVIDIA experienced a significant surge of 6% in its share price, hitting a record high of $1,128 on Tuesday. This increase brought NVIDIA's stock market value to within $100 billion of Apple, marking a notable shift among Wall Street's leading companies. The chipmaker's market capitalization reached an impressive $2.8 trillion, compared to Apple's market value of $2.9 trillion. The iPhone-maker is the second-most valuable company on Wall Street while Microsoft leads the list with an m-cap of nearly $3.2 trillion.
NVIDIA's shares soar following revenue projection
During Tuesday's trading session, NVIDIA's stock surged by as much as 8% to $1,149.39, setting a new intra-day record high. This surge follows a nearly 13% increase in the company's shares since it projected second-quarter revenue above Wall Street expectations last week and announced a 10-for-1 stock split. In contrast, Apple saw its stock dip by 0.2% in afternoon trading on the same day.
Analysts comment on NVIDIA's impressive growth trajectory
Derren Nathan, head of equity analysis at Hargreaves Lansdown, commented on NVIDIA's growth, stating "The market has been struggling to keep up with the company's ever improving growth trajectory." He added that despite a mid-thirties forward earnings multiple, it doesn't feel like bubble territory. According to LSEG data, NVIDIA recently traded at 36 times its forward profit estimates. Investment analyst at AJ Bell, Dan Coatsworth also spoke positively about the stock rally and the company's potential for continued growth.
NVIDIA's revenue boosted by high-performance chips demand
NVIDIA has more than doubled its shares this year after tripling them last year, largely due to a five-fold increase in revenue at its data center segment. This significant growth is attributed to the high demand for their high-performance chips. Alphabet, Microsoft, and Amazon are among those vying for NVIDIA's limited supply of high-end chips in their race to dominate AI computing.
Apple's market performance lags behind other tech giants
In contrast to NVIDIA's soaring success, Apple has been underperforming other Big Tech companies in recent months. The company has seen a fall of around 2% this year due to weak iPhone demand and stiff competition in China. Earlier this year, Microsoft overtook Apple as the world's most valuable company due to gains from early investments in artificial intelligence across its cloud services.
