Nvidia Overtakes Apple In Market Value Amid AI Chip Demand

Nvidia reached unprecedented heights on Wednesday, with its market valuation surpassing USD 3 trillion, overtaking Apple to become the world’s second most valuable company. 

The AI chipmaker’s stock climbed 5.2 per cent, closing at USD 1,224.40, resulting in a market capitalisation of USD 3.012 trillion. In comparison, Apple’s market cap stood at USD 3.003 trillion after its stock saw a modest 0.8 per cent rise. Despite this shift, Microsoft remained the world’s most valuable company with a market cap of USD 3.15 trillion, buoyed by a 1.9 per cent increase in its share price.

The exceptional performance of Nvidia’s stock, which has surged 147 per cent so far in 2024, is driven by an insatiable demand for its advanced processors. Tech giants such as Microsoft, Meta Platforms, and Alphabet are fiercely competing to enhance their AI computing capabilities, leading to a significant increase in demand for Nvidia’s products. Nvidia’s stock has rallied nearly 30 per cent since May 22, following an optimistic revenue forecast that further fueled investor enthusiasm.

In a bid to attract more individual investors, Nvidia is set to implement a ten-for-one stock split effective 7 June. This strategic move is expected to increase the stock’s appeal and accessibility, potentially driving further gains.

The AI-driven optimism also lifted the broader semiconductor sector, with the PHLX chip index jumping 4.5 per cent. Companies like Super Micro Computer, which specializes in AI-optimised servers using Nvidia chips, saw their shares rise 4 per cent.

(Inputs from Reuters)