New Delhi: Nvidia, an American software company, has overtaken Apple as the world’s most valuable company on Friday, following a record-setting rally in the stock market powered by an insatiable demand for its new supercomputing artificial intelligence (AI) chips.
According to London Stock Exchange Group (LSEG) data, Nvidia’s stock market value touched $3.53 trillion for a brief period, while that of Apple’s value was $3.52 trillion. The stock has surged nearly 190% so far this year as a boom in generative AI prompted the company to issue a series of blowout forecasts.
Nvidia had briefly become the world’s most valuable company for a short period in June this year, before it was overtaken by Microsoft and Apple. The tech trio’s market capitalizations have been neck-and-neck for several months. Microsoft’s market value stood at $3.20 trillion.
Also Read: Nvidia Corp ties up with Reliance, Tata for AI-based tech solution
Nvidia’s stock has risen about 18% so far in October, with a string of gains coming after OpenAI—the company behind ChatGPT—announced a funding round of $6.6 billion. Nvidia provides chips used to train foundation models such as OpenAI’s GPT-4.
“More companies are now embracing artificial intelligence in their everyday tasks and demand remains strong for Nvidia chips,” said a market analyst at AJ Bell, adding that it was certainly in a sweet spot and so long as we avoid a big economic downturn in the United States.
Also Read: Double digit revenue growth puts India as a focus area for Apple
On Tuesday, Nvidia’s shares hit a record high, building on a rally from last week when TSMC, the world’s largest contract chipmaker, posted a forecast-beating 54% jump in quarterly profit driven by soaring demand for chips used in AI.
However, investors would be waiting anxiously for November when Nvidia would announce its third-quarter results. Nvidia in August forecast third-quarter revenue of $32.5 billion, plus or minus 2%, compared with the current average analyst expectation of $32.90 billion, according to data compiled by LSEG.
Also Read: Reliance Foundation ties up with NSDC to upskill 5 lakh youth
After a meeting with Nvidia’s CEO Jensen Huang, Moore noted the ramp up in production of its next-generation Blackwell chips appeared to be “quite strong” and are booked out for 12 months. The stock came under pressure in August after Nvidia confirmed reports that the production of Blackwell chips was delayed until the fourth quarter.
Frenzy around the prospects of AI, expectations that the U.S. Federal Reserve will considerably bring down interest rates, and most recently, an upbeat start to the earnings season, have pushed the benchmark S&P 500 to an all-time high last week.
Also Read: Apple to hire 5 lakh staff in India to scale up production range
Market experts said that Nvidia’s massive gains have helped boost the stock’s appeal for option traders and the company’s options are among the most traded on any given day in recent months, according to data from options analytics provider trade alert.
