Nvidia is close to usurping Apple’s position as the world’s most valuable company

Nvidia shares ended the session with an increase of 0.8%, with a market value of about 3,470 billion USD, while Apple shares were flat with a valuation of about 3,520 billion USD.

However, data of LSEG shows that the chip manufacturer’s stock market value briefly touched $3,530 billion on Friday, higher than Apple’s capitalization of $3,520 billion.

Previously, in June, Nvidia also briefly became the most valuable company in the world before being surpassed by Microsoft and Apple. The market capitalizations of this trio of tech companies were neck-and-neck for months, before Nvidia and Apple widened the gap. As of the most recent session, Microsoft’s capitalization reached more than 3,180 billion USD.

Nvidia is currently the dominant supplier in the chip segment serving artificial intelligence (AI) related activities. The Silicon Valley chipmaker is also the winner in the race against Microsoft, Alphabet, Meta Platforms and other large companies in this emerging field.

Entering the market in 1990 as a designer of processors for video games, the chipmaker’s shares have risen nearly 190% this year and about 18% in October, after OpenAI – the company behind ChatGPT, announced a capital round worth 6.6 billion USD.

Nvidia and other semiconductor stocks jumped after data storage hardware maker Western Digital reported quarterly profit that beat analysts’ estimates, boosting optimism about data center demand. .

“More and more companies are applying AI to their everyday tasks, and demand for Nvidia chips remains strong,” said Russ Mould, Chief Investment Officer at AJ Bell.

The chipmaker’s shares also hit a record high earlier this week, after TSMC – the world’s largest contract chipmaker – announced a 54% increase in quarterly profit, thanks to increased demand. high for chips used in AI.

Meanwhile, Apple is struggling with tepid demand for its smartphone products. iPhone sales in China decreased by 0.3% in the third quarter, while rival Huawei achieved an increase of 42%. Analysts predict Apple’s revenue could increase 5.5% in the third quarter compared to the same period last year. This figure is significantly lower than analysts’ predictions of Nvidia’s nearly 82% revenue growth, to $32.9 billion.

Shares of Nvidia, Apple and Microsoft have a major influence on the technology sector, as well as US stocks in general, as the trio account for about one-fifth of the market capitalization of the S&P 500 index.

Optimism about the prospects of AI, expectations of interest rate cuts by the US Federal Reserve (Fed) and most recently a positive start to the third quarter reporting season have brought the S&P 500 to an all-time high. great last week. According to data from options market information provider Trade Alertthe chipmaker’s big gain also boosted its appeal to options traders, with a record increase in liquidity.

However, there are still concerns surrounding the record increase of nearly 190% since the beginning of this year of Nvidia shares.

Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey, said it’s worth asking whether Nvidia’s revenue growth will last and the stock’s gains are fueled by driven by investors’ emotions or not. “This is more important than proving or disproving the argument that AI is overdeveloped,” Meckler said.