Nvidia surpasses Apple in market value fleetingly

WEB DESK: Nvidia surpassed Apple briefly when its market value rose past $3 trillion to become the world’s second-most valuable company.

The achievement follows a year of exceptional growth driven by soaring demand for its artificial intelligence (AI) chips.

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The US chip designer’s shares rose almost 5 per cent, propelling its market capitalisation beyond Apple’s for the first time. It reached $3.01 trillion, according to Bloomberg’s data.

Nvidia’s rise in market value comes at a time when Apple lost its position as the most valuable listed company to Microsoft earlier this year.

Investors continue to flock to Nvidia’s stock, buoyed by significant investments from tech giants such as Google, Microsoft, and Meta (Facebook) in its chips, indicating sustained demand for its products.

Nvidia’s data center chips are known for powering AI models. The company reported earnings report in May, with revenues soaring by 262 per cent year-on-year (YOY). This was primarily fueled by increased sales of its “Hopper” chips.

Despite concerns in some quarters about the sustainability of Nvidia’s growth trajectory, the company’s earnings performance and positive outlook have significantly contributed to Wall Street’s gains this year. However, Nvidia’s valuation, while elevated, remains within reasonable bounds when compared to its historic or projected profits.

Meanwhile, Apple, once at the forefront of market hype around generative AI, has seen a decline in its stock performance, partly attributed to a drop in iPhone sales and increased competition in China.

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However, the tech giant’s CEO Tim Cook said he remains optimistic about his company’s prospects in AI. The company has plans to integrate generative AI features into its products, including in the upcoming Worldwide Developers Conference on Monday.