Nvidia overtook Apple on Friday to become the world’s most valuable company, driven by massive demand for its advanced AI chips. Nvidia’s market value briefly hit $3.53 trillion, while Apple’s was at $3.52 trillion, according to data from LSEG.
After a brief stint as the most valuable company in June, Nvidia was surpassed by Microsoft and Apple. Currently, Microsoft is valued at $3.20 trillion, with these three tech giants closely competing in market capitalization.
Nvidia’s stock rose 18% in October, especially after OpenAI’s announcement of a $6.6 billion funding round to further develop AI, powered by Nvidia’s AI chips used in training models like GPT-4.
Russ Mould, an investment director at AJ Bell, said, “More companies are integrating AI into daily operations, which keeps demand high for Nvidia chips.” He added that as long as the U.S. economy remains stable, investments in AI are likely to grow, benefiting Nvidia.
Nvidia’s shares hit record highs recently after TSMC, a major chipmaker, reported profits up 54% due to demand for AI chips. The market now awaits Nvidia’s Q3 report in November, with the company expecting revenue near $32.5 billion.
Morgan Stanley analyst Joseph Moore remains optimistic about Nvidia’s future but notes that recent gains may set a high bar for earnings. After a meeting with Nvidia’s CEO Jensen Huang, Moore mentioned that production of the new Blackwell chips is progressing strongly and is fully booked for the next year.
With shares of Nvidia, Apple, and Microsoft making up nearly a fifth of the S&P 500, the tech sector has seen a major boost from the AI boom, along with expectations of a decline in U.S. interest rates and strong early earnings reports.
The spike in Nvidia’s value has also sparked high interest among option traders, making it one of the most active stocks in options trading this year. Nvidia’s stock has soared nearly 190% in 2023, largely fueled by the AI craze and investor excitement.
Rick Meckler of Cherry Lane Investments commented, “The question now is how long these revenue gains can last, but in the short term, Nvidia’s numbers are likely to be impressive.”
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