NVIDIA hits $3.53 trillion, overtakes Apple as top-valued company globally
NVIDIA has dethroned Apple to become the world's most valuable company, following an unprecedented stock rally fueled by high demand for its specialized artificial intelligence (AI) chips. According to Reuters, NVIDIA's market cap briefly hit $3.53 trillion on Friday, just above Apple's $3.52 trillion. The chip-making giant's shares rose by about 3%, while the iPhone maker's shares climbed by 0.9%.
Journey to the top
Notably, this isn't the first time NVIDIA has claimed the title of the world's most valuable company. Back in June, it briefly held the position before being overtaken by Microsoft and Apple. The market caps of these tech giants have been closely competing for months now. Currently, Microsoft's market value sits at $3.20 trillion with its stock up 1.3%.
Dominance in AI computing
NVIDIA, the leading supplier of processors for AI computing, has become the biggest winner in the race to dominate the nascent technology. The company is up against tech heavyweights such as Microsoft, Alphabet, Meta Platforms, and others. Once known for designing video game processors, NVIDIA's stock has surged by some 18% this month alone.
Factors contributing to stock surge
Several factors have led to NVIDIA's stock surge. OpenAI, the company behind ChatGPT, recently announced a $6.6 billion funding round, which resulted in gains for NVIDIA and other semiconductor stocks. Further, data storage maker Western Digital reported quarterly profits that surpassed estimates, further fueling optimism about data center demand. All these developments have helped push NVIDIA's shares to a record.
Apple's struggles and NVIDIA's projected growth
On a related note, Apple is struggling with tepid smartphone demand as iPhone sales in China fell 0.3% in the third quarter. Meanwhile, sales of phones from rival Huawei surged a whopping 42%. According to analysts' estimates, NVIDIA will witness nearly 82% revenue growth to $32.9 billion, while Apple's revenue will rise 5.55% year-on-year to $94.5 billion when it announces quarterly results next week.
Chipmaker's influence on US stock market
The shares of NVIDIA, Microsoft, and Apple dominate the technology sector and the entire US stock market, making up for nearly a fifth of the S&P 500 index's weight. These stocks are heavyweights that can propel indices higher with a sudden surge in share prices. Optimism over AI prospects, expectations of lower US interest rates by the Fed, and an upbeat start to earnings season have all lifted the benchmark S&P 500 to an all-time high last week.
